IRAQ | Oil & Gas Fields Drilling and Development

[BigDreamer]

thread cleaned up stick to topic everyone

[Ali - Iraq]

HOME / NEWS / KBR WINS FEED CONTRACT FOR IRAQ OIL FIELD

KBR wins FEED contract for Iraq oil field
on Dec 9, 2012

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RELATED ARTICLES: KBR wins huge power project at Jizan refinery l KBR clinches Saudi Aramco contract l KBR to oversee building of 30 roads in Doha

US engineering firm KBR has announced that it has won a Front End Engineering & Design (FEED) contract and a deal to provide Quality Control Support Services (QCSS) for the Mansuriya oil field project in Iraq's Diyala Province.

The field is being operated by the Turkish Petroleum Overseas Company (TPOC), which owns a 37.5% stake in the venture. Other shareholders include the Oil Exloration company (25%), Kuwait Energy (22.5%) and Korea Gas Corporation (15%).

The project is aimed at providing fuel to power stations and industrial plants in a bid to alleviate intermittent problems with the country's electricity supply.

KBR's contract will see it perform FEED and QCSS studies during construction and installation of the field's production and export systems which will include the building of LPG storage facilities and onsite loading facilities ahead of the field beginning to produce gas by the middle of 2015. The field is expected to produce around 320 million standard cubic feet of gas per day frm hitting peak capacity in 2017 for 13 years.

KBR said that the project will be serviced from its offices in London and Jakarta, alongside an employee support office in Baghdad.

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President of the firm's Middle East Region, Khaled Abu-Nasrah, said: “The Mansuriya project builds upon KBR’s long-standing commitment to serve Iraq and further solidifies our position as a premier contractor in the Middle East.

“KBR brings the experience and expertise of working in logistically challenging areas like Diyala, so we are able to successfully navigate issues to help TPOC meet its first gas date. I am confident that KBR’s successful execution of this project will position us for additional services in Iraq and throughout the region.





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[Ali - Iraq]

Iraq says Vitol apologises for Kurdish oil purchase
By Peg Mackey | December 10, 2012 11:23 AM
Reuters

VIENNA: Top oil trader Vitol has apologised to the Iraqi government for buying Kurdish oil that was exported via Turkey without Baghdad's permission, Iraqi Oil Minister Abdul-Kareem Luaibi said on Sunday.

Baghdad is in dispute with Kurdistan over oil exports from the northern Iraqi province, insisting the central government has the sole right to export oil, reimbursing payments to the Kurdistan Regional Government (KRG).

It considers any other business illegal and tantamount to smuggling by the Kurds.. The KRG says exports on its own behalf are legitimate.

Luaibi, in Vienna for an OPEC meeting, was asked by reporters how Iraq was dealing with three companies -- Vitol, Trafigura and LUKOIL -- who have purchased condensate, a light crude oil, sourced from Kurdistan and sold via an intermediary to world markets.

"In terms of Vitol, they have cancelled the Kurdish amount and they apologised officially," said Luaibi. "As for LUKOIL, there will be a meeting about this concern - maybe tomorrow or the day after." He made no mention of Trafigura.

Kurdistan began selling oil into international markets in independent export deals in October, further challenging Baghdad's claim to full control over Iraqi oil after signing independent exploration deals with foreign oil majors last year.

Luaibi said Kurdistan is now supplying less than 100,000 barrels a day to the central government via a Baghdad-controlled pipeline to Turkey, compared to the 200,000 bpd it has agreed to deliver. Output from Kurdistan is rising but is still only a fraction of total Iraqi exports of 2.6 million bpd.

Luaibi said Baghdad had been informed about oil smuggling by neighbouring countries. "We have received messages from the adjacent neighbour countries concerning the smuggling of Iraqi crude oil," he said. "Iraq will work against any company that buys these smuggled shipments."

Luaibi declined to put a number on how much oil was being smuggled from Kurdistan to Iran and Turkey and then into world markets, but said the volume amounted to the difference between what was being produced by the Kurds and supplied to the central government.

Kurdish deliveries to Baghdad were more than 180,000 bpd last month, he said, and are now below 100,000 bpd.

In April, Kurdistan halted shipments of its oil in protest over what it said were overdue payments from the central government to companies in the Kurdish region.

Baghdad made an initial payment to the KRG in October, but a subsequent payment is now overdue and Iraq's deputy prime minister for energy, Hussein al-Shahristani, recently said it would not be made.

Regional sources have said Kurdistan is not getting enough refined oil products to run its power stations under supplies controlled by the central government.

[Ali - Iraq]

New Iraqi Oil Prices for January
Posted on 10 December 2012. Tags: oil prices

By John Lee.
Iraq’s State Oil Marketing Organisation (SOMO) has this morning adjusted its official selling prices for its Basra Light and Kirkuk crude grades for January.
In common with some other countries, Iraq’s oil is priced relative to regional benchmark prices:
For shipments to US, contracts are priced are relative to the Argus Sour Crude Index (ASCI);
Shipments to Europe are priced relative the North Sea Spot BFOE; and
Asian shipmentas are priced relative to the Dubai-Oman crude benchmark, published by Platts, the energy-information division of McGraw-Hill.
The new prices to Europe are as follows:
Kirkuk crude to Europe will sell at a discount of $2.35 a barrel relative to the North Sea (Dated Brent) benchmark, compared to a discount of $1.90 previously;
Basra Light to Europe will sell at a discount of $4.60 a barrel to Dated Brent, compared to a discount of $3.85 previously.
And to the US:
Basrah Light will sell at a $2.20 discount to the U.S. benchmark, up 40 cents on the previous month.
Kirkuk will sell at a premium of 60 cents, up from par last month.
To Asia:
Basrah Light to Asia will sell at a premium of 5 cents to the benchmark, the same as last month.

[Ali - Iraq]

* Iraq won't consider output restraint until 2014

* Delegates say Saudi thinks Iraq should lead next cut

* OPEC curbs may be needed in 2013 as stocks swell

* Deal to keep 30 mln bpd output target expected

By Amena Bakr and Emma Farge

VIENNA, Dec 12 (Reuters) - A new rivalry at the top of the OPEC oil group has emerged, pitting up-and-coming Iraq against undisputed cartel heavyweight Saudi Arabia.

Having overtaken Iran as OPEC's second biggest producer, a rejuvenated Iraq is beginning to worry Riyadh.

At Wednesday's meeting of the Organization of the Petroleum Exporting Countries the opening salvos were fired in the struggle over who takes responsibility for cutting output if oil prices, now at a comfortable $108 a barrel, start falling.

After 20 years of war, sanctions and civil strife that left its oil industry in disarray, Iraq is no mood to consider curtailing output just as it starts to take off.

"Iraq will never cut production," said Iraq's OPEC Governor Falah Alamri. "Some countries that have increased their production in the last two years - they should do so. This is a sovereign issue, not an OPEC issue."

That was a clear reference to Saudi Arabia, which this summer lifted output to a 30-year high above 10 million barrels a day to prevent oil prices ballooning after Western sanctions on Iran halved its production.

The view from Riyadh, said delegates at the meeting, is that Iraq should not just contribute, but lead, the next round of OPEC supply curbs.

If Saudi pushed that line there would be "dark days ahead" warned a senior Iraqi official, saying Baghdad would not even consider output restraints until 2014.

OPEC delegates said on Wednesday the group had agreed to retain its 30-million barrel-a-day output target, but many market observers think supply restrictions may be needed sooner rather than later if producers want to prevent slow global growth sending prices tumbling.

"Every additional barrel that Iraq produces reinforces its confidence and its expectations that higher production is achievable - and it will negotiate on that basis," said Raad Alkadiri of Washington consultancy PFC Energy.

"Now OPEC is dealing with a much more confident Iraq and Baghdad is looking at regional politics and is less willing to compromise."

"Iraq is impervious to arguments. It says that it was subject to sanctions for so long that it has a free pass to rebuild its economy," said Neil Atkinson, director of energy research at Datamonitor.

Output from OPEC is already down sharply from the highs of the summer when the Saudi surge took the 12-member group to nearly 32 million bpd. Production in November was down to 30.8 million with Saudi easing to 9.5 million.

But OPEC may need to ease further to balance the market in the first half of next year when, demand depressed by a stagnant economy, its own forecasts indicate the requirement for OPEC crude will come in at only 29.25 million bpd.

"We're concerned by the drop in demand and the high level of stocks," said Algerian Energy Minister Youcef Yousfi.

"There is rising oil from places like the United States and Iraqi output is rising quite sharply. There's a risk that we see a sharp drop in price next year," said Atkinson.

IRAQ RISES

The world's fastest growing crude exporter, Iraq expects more gains next year as foreign companies push production towards the highest level ever, Iraqi Oil Minister Abdul-Kareem Luaibi told reporters on Sunday ahead of the Vienna meeting.

Output began to rise in earnest in 2010 after Baghdad secured service contracts with companies such as BP, Eni , Exxon Mobil and Royal Dutch Shell

Flows have now reached 3.4 million bpd - up nearly a million bpd from when companies got down to work three years ago.

Luaibi said output in 2013 is expected to average 3.7 million bpd - just shy of an all-time high of 3.8 million, hit in 1979 with exports running at 2.9 million bpd, including 250,000 bpd contributed by the semi-autonomous northern Kurdistan Regional Government (KRG).

The changing shape of Middle East politics after the U.S.led overthrow of Saddam Hussein in 2003 and the 2011 Arab Spring plays into OPEC dynamics.

"Political issues sit behind this rivalry," said PFC's Alkadiri. "Regional alliances are pitting Saudi Arabia, Iraq and Iran against each other."

Adding to the heat is the dramatic rise in oil output from the United States, spurred by hydraulic fracturing of shale reserves.

The U.S. Energy Information Administration said on Tuesday that U.S. output will increase 760,000 bpd in 2012, the fastest pace since commercial oil production began in 1859.

After years outside OPEC's quota system because of low output, Iraq was brought into the fold a year ago when it set the 30 million bpd target for all 12 producers. But unlike previous OPEC deals no individual quotas were assigned.

That suited Saudi Arabia, leaving it free to balance the markets by using its spare capacity as it saw fit.

But in the event of a build in inventories that hits prices, OPEC may need to restore quotas if it is to enforce a credible production cut.

That is likely to prove very difficult, not just because of Iraq but because Iran is very unlikely to accept a quota anywhere near its sanctions-constrained production. Venezuela too could resist a lower quota after disputing independent estimates of its output for years.

"Quotas would become a big issue if we see a price drop and then everyone would have to come to the table," said Datamonitor's Atkinson. "That would cause enormous problems for Iran and Venezuela."

OPEC can only hope that a difficult decision is postponed by a continued stand-off between Western powers and Iran over Iran's nuclear programme, and the threat of Israeli military action, keeping oil prices high.

That could mean a repeat of 2012, with oil prices supported in 2013 for fear of an attack on Iran, even if demand is poor and market fundamentals weaken.

"Lady luck has been a huge help for OPEC because the macro numbers do not add up to 2012 being a successful year," said oil brokers PVM. "She has come in the form of geopolitical tensions and supply uncertainties which have kept speculative interest in oil lively and stimulated stock building."

[BigDreamer]

someone tell the saudis to stfu .. how dare they tell us to cut our production while they sold their oil for DECADES while we were sanctioned and producing significantly less than our potential

[Ali - Iraq]

Originally Posted by BigDreamer

someone tell the saudis to stfu .. how dare they tell us to cut our production while they sold their oil for DECADES while we were sanctioned and producing significantly less than our potential

Eee 3fya bigD!

[Basrawii]

Originally Posted by BigDreamer

someone tell the saudis to stfu .. how dare they tell us to cut our production while they sold their oil for DECADES while we were sanctioned and producing significantly less than our potential

Dude, the Iranians, the Saudis and the rest of the OPEC are all standing against Iraq. Especially, Saudi Arabia and Iran, they awkwardly are united against Iraq in this meeting, the Saudis don't want to see Iraqi crude production affecting their methods of market stabilization (i.e. they want to control the price, since they are the greatest producers) and the Iranians are already hurt that Iraq have occupied their place in the production charts, they produce less now and want the price to be as high as possible. I expect Iraq leaving the OPEC cartel anytime soon next year and work on its own.

In such case, their will be no caps on Iraqi production limits, no OPEC policy controls and might even bring the OPEC into chaos as more states would rather have their own control of their market share. (May be Nigeria, Algeria and others) This all might bring price down next year from 90-70$. Good news for the consumers, bad news for Iran and Saudi Arabia, very very bad for Iran.

This also means our budget has to go slightly down and be readjust to realistic numbers.

[BigDreamer]

I agree, lets leave it... why are we there.. i don't get it ! OPEC isn't what it used to be in 70s ... now that we have market giants like Russia, Canada etc..

i hope we will leave it

[Basrawii]

Of course, leaving the OPEC is not an easy decision, it is like divorce, there is no way back, it might be beneficial to us on the short term but not on the long term as we tend to decrease our production in the future to an economic standard.

Fuck me... what am I doing studying petroleum engineering... I should do petroleum economics!

[Ali - Iraq]

Originally Posted by Basrawii

Of course, leaving the OPEC is not an easy decision, it is like divorce, there is no way back, it might be beneficial to us on the short term but not on the long term as we tend to decrease our production in the future to an economic standard.

Fuck me... what am I doing studying petroleum engineering... I should do petroleum economics!

[BigDreamer]

my understanding is that iraq will be one of the last countries to run out of conventional oil (not counting oil shale etc).. assuming of course that we will manage it intelligently.. so who cares about OPEC

the only reason we haven't left is because we are founding member.. but who gives a fuck.. times have changed.. it used to control 2 thirds of the world's oil exports, now its about a third !

[Basrawii]

Originally Posted by BigDreamer

I agree, lets leave it... why are we there.. i don't get it ! OPEC isn't what it used to be in 70s ... now that we have market giants like Russia, Canada etc..

i hope we will leave it

Being part of the OPEC helps much, especially in the case of Iraq where there is no clear production strategy, our way of doing things since joining the OPEC was to agree to what the OPEC decides. We had our own disagreement with them before as we needed the total production to be lowered after the Iran war.

If we leave the OPEC, I think we might fail to produce a good oil policy on the long term, we do not have the personnel or the expertise to do such a job, we will most probably depend on international consultancy firms or a limited number of experts with no much modern market knowledge. This is my biggest fear. I'm afarid we might lower the price too much by going alone and become the biggest loser, remember, we have no influx of resources in Iraq or diversification. We rely 100% on oil, today it is a very precious and pricy commodity... tomorrow it might not. We need to cash our chips now and fast but slowly... i.e. we need to do it in an organized manner so we don't get the prices below 90$

If we go and push hardly pumping 7-9 mbpd, that would be a mistake (technically we can't do that, not after 3-4 years) but we need to maintain 3-5 mbpd for the next couple of years which will keep the market price nicely above the 90 price... but that depends on other producers (thats why we need OPEC), we need others to limit their production too, if they don't then, the market will be overwhelmed and we wouldn't have enough funds for reconstruction.

[Basrawii]

Opening address to the 162nd Meeting of the OPEC Conference

No 5/2012
Vienna, Austria
12 Dec 2012
by HE Abdul-Kareem Luaibi Bahedh, Minister of Oil of Iraq and President of the Conference

Excellencies, ladies and gentlemen,

Welcome to Vienna for the 162nd Meeting of the OPEC Conference.

I should like to extend a special welcome to His Excellency Dr Abdel Bari Ali Al-Arousi, the Minister of Oil and Gas of Libya, who is attending the Conference for the first time as Head of his Country's Delegation. Let me also thank his predecessor, His Excellency Eng Abdurahman Benyezza, for his contributions to the Conference during his time in office.

As we approach the end of the year, we are faced with a period of continuing uncertainty about the oil market outlook. To a great extent, this reflects the lack of a clear vision on the economic front. The global economy has experienced a persistent deceleration since the beginning of the year. The combination of an austerity-driven Euro-zone, the weakening recovery in Japan and clear signs of a slowdown in major emerging economies has provided the main factors behind this development. In the light of this, world oil demand growth forecasts for this year have been revised down frequently. At the same time, non-OPEC supply and OPEC natural gas liquid output have continued to perform well, outpacing demand growth. This trend is not expected to change in the coming year, with the market continuing to see high volumes of crude supply and increasing production capacity.

Turning to oil prices, while these have strengthened in the six months since the Conference last met, there have been continuing fluctuations. In June, at around the time of the Conference, prices were at their lowest daily levels for the year, with the Reference Basket price below US $100 a barrel throughout the month. It even fell below $90/b for three days. However, the Basket price then rallied strongly past $110/b in the middle of August. But after that, for most of the time since mid-September, it has been several dollars a barrel beneath this mark. This drop has reflected mounting concern about the global economic slowdown, the pessimistic future demand outlook and significant stockbuilds of crude in the United States of America. Such downward pressures have outweighed supply concern arising from geopolitical factors.

For its part, OPEC continues to do what it can to achieve and maintain a stable oil market. A key aspect of this is to ensure that the market remains well supplied with crude at all times, with fair and reasonable prices. For this to happen, there must be clear planning for the future, with sound investment strategies ensuring the necessary levels of production capacity in the years ahead. But the drawing-up of such strategies is impeded by uncertainties on both the demand and the supply fronts, as well as by high levels of price volatility. Clearly there are many doubts about the market outlook today. Without market stability - that is, sustainable market stability - all parties will suffer, producers and consumers alike.

At today's meeting, therefore, we shall be examining the market outlook for next year and further into the future. Our focus will be on enhancing market stability in the interests of all parties, as well as in support of steady world economic growth. However, this is not the responsibility of OPEC alone. If we all wish to benefit from a more orderly oil market, then we should all be prepared to contribute to it. This includes consumers, non-OPEC producers, oil companies and investors, in the true spirit of dialogue and cooperation.

Thank you for your attention.

[BigDreamer]

Originally Posted by Basrawii

Being part of the OPEC helps much, especially in the case of Iraq where there is no clear production strategy, our way of doing things since joining the OPEC was to agree to what the OPEC decides. We had our own disagreement with them before as we needed the total production to be lowered after the Iran war.

If we leave the OPEC, I think we might fail to produce a good oil policy on the long term, we do not have the personnel or the expertise to do such a job, we will most probably depend on international consultancy firms or a limited number of experts with no much modern market knowledge. This is my biggest fear. I'm afarid we might lower the price too much by going alone and become the biggest loser, remember, we have no influx of resources in Iraq or diversification. We rely 100% on oil, today it is a very precious and pricy commodity... tomorrow it might not. We need to cash our chips now and fast but slowly... i.e. we need to do it in an organized manner so we don't get the prices below 90$

If we go and push hardly pumping 7-9 mbpd, that would be a mistake (technically we can't do that, not after 3-4 years) but we need to maintain 3-5 mbpd for the next couple of years which will keep the market price nicely above the 90 price... but that depends on other producers (thats why we need OPEC), we need others to limit their production too, if they don't then, the market will be overwhelmed and we wouldn't have enough funds for reconstruction.

my prediction is that iraq will pump 8 mbd by mid 2020s, buy that time many oil exporters would have their exports significantly decrease, or they become a consumer nation (eg like what happened to Indonesia in recent years) .. so pumping 8 mbd will be sustainable..

as for oil policy.. right now we dont follow anything we just sell as much as we can in a day ! so it doesnt matter if we are in our out of OPEC ! we're not exactly abiding by any decisions.. and dont think we will need to worry about cutting production till after 2020 IMHO .. and unless some major development takes hold (like hydrocells becoming mainstream).. i doubt we will cut production significantly (as saudi arabia does)..

[alshawi1234]

I don't think Iraq will tolerate any orders to limit production, Saudi should decrease production instead, the numbers are not proportional or fair.

If the KSA production is 9.5 million, Iraq's Limit should not be any less than 6-7 million.

I guess it all depends on the world economy, china and India are growing, we should focus on supplying them even if it mean a few cents discount per barrel.

Producing too much isn't good neither, the market should not be flooded otherwise the prices go down.

[Basrawii]

Originally Posted by BigDreamer

my prediction is that iraq will pump 8 mbd by mid 2020s, buy that time many oil exporters would have their exports significantly decrease, or they become a consumer nation (eg like what happened to Indonesia in recent years) .. so pumping 8 mbd will be sustainable..

as for oil policy.. right now we dont follow anything we just sell as much as we can in a day ! so it doesnt matter if we are in our out of OPEC ! we're not exactly abiding by any decisions.. and dont think we will need to worry about cutting production till after 2020 IMHO .. and unless some major development takes hold (like hydrocells becoming mainstream).. i doubt we will cut production significantly (as saudi arabia does)..

I agree that for the next 5 years, everything we will be doing is increasing production, but still we much need to have market intelligence.

We would have to be more controlling.

[sheytanElKebir]

well. its an opinion

http://www.iraqoilforum.com/wp-conte...l-A-Target.pdf

[abii]

Can someone tell me what the breakdown is regarding the profits. What percentage goes to Iraq and what goes to oil companies?

Edit: btw, the production quotas are based on the total reserves. The higher your oil reserves, the more you're "allowed" to produce. This has of course resulted in Iran, Iraq, Saudi and pretty much every other oil producing nation to pull numbers out of their behinds when it comes to total proven oil reserves. All three countries are lying.

[josef hadi]

اخي عندما تقول نسبة هذا يعني ان الشركات دخلت بعقود شراكة مع العراق وهذا غير صحيح، صفقات عقود النفط التي ابرمت مع الشركات العالمية هي عقود خدمة تستلم الشركات بموجبها سعر معين عن كل برميا نفط انتاج، وتتفاوت الاسعار من حقل الى آخر، فبينما تكون في حقول مثل الرميلة او مجنون كلفة الانتاج اقل من ٣ دولارات ترتفع بحقول مثل حقل الاحدب بمدينة الكوت النفطي الى ستة دولارات وهكذا

بخصوص الحصص فدولة مثل السعودية تصدر حالياً اكثر من حصتها لسد العجز الحاصل وضمان استقرار الاسعار
وهناك دولة مثل الكويت تتلاعب بالنسب السكانية باحتفاظها باكثر من ٦٠ الف من البدون لتزيد حصتها
وهناك العراق والذي تقدر حصته ب اربعة ملايين برميل يومياً غير قادر على الاستفادة القصوى من حصته حتى لعامين مقبلين
ولديك ايران محاصرة وتصدر اقل من حصتها
اما الاعلان الكاذب كما قلتم فأوپك لديها مختصين يرسلون لجان للتأكد ولكن العبرة بالكمية القابلة للانتاج والاستخدام وليس الكمية او المخزون المتواجد بمكونات كثيرة مثل الرمل والصخر صعب الاستخراج منها ضمن الاسعار الموجود حالياً

Originally Posted by abii

Can someone tell me what the breakdown is regarding the profits. What percentage goes to Iraq and what goes to oil companies?

Edit: btw, the production quotas are based on the total reserves. The higher your oil reserves, the more you're "allowed" to produce. This has of course resulted in Iran, Iraq, Saudi and pretty much every other oil producing nation to pull numbers out of their behinds when it comes to total proven oil reserves. All three countries are lying.