Newsletter – February 2022

Al Majal continues its participation as gold sponsor in the upcoming Iraq Business Forum event, which is taking place in Dubai on March 16th.

The new expertly designed, multisport area at Al Majal Business Park (AMBP) – North Rumaila, has something for everyone!

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.

Iraq’s nationwide production fell to 4.32 Mb/d in January up from December’s 4.49 Mb/d, according to Iraq Oil Report.

Iraq’s nationwide oil exports fell to 3.619 Mb/d in January, down from 3.681 Mb/d from December levels.

The giant West Qurna-2 oilfield is undergoing maintenance for nearly a month, removing around 400 kb/d of production at a time when global oil prices are spiking due to the Russian invasion of Ukraine and escalating sanctions on Russia.

Iraqi oil workers’ protests caused shutdown at the Nassiriya field, operated by the state-run Dhi Qar Oil Co. (DQOC). Workers have been demanding jobs and land compensation around the field.

The KRG is extending its gas pipeline network towards the Turkish border, potentially unlocking gas supplies at various fields, increasing domestic power generation, and paving the way for potential future exports.

Iraq is negotiating with US Halliburton for the Akkas Gas development, part of the country’s strategy to increase non-associated gas output to 2.7 Bcf/d in 2025, from the current 1.5 Bcf/d.

The long-delayed Karbala refinery is expected to come online by September 2022, allowing Iraq to produce high-quality light oil products to meet rising gasoline demand.

On February 9, Iraq’s cabinet approved the execution of the long-delayed Haditha oil refinery project to boost oil production. Iraq’s state-run North Refineries Co.

Iraq has continued to look for solutions to its power crisis and dependence on Iranian gas and electricity. These include planned purchases of 500 MW from Turkey, and an interconnection with Saudi Arabia, though these would only be very partial solutions.

Progress on this 1 GW set of projects continues to await decision from a new government.

Iraq has made some progress on its clean energy target in discussions with TotalEnergies, Masdar and PowerChina to develop large solar projects.

In mid-February, Iraq’s Federal Supreme Court (FSC) – highest in the land – issued a ruling against the legal foundations of Iraqi Kurdistan’s independent oil sector.

The caretaker government has continued spending in monthly increments of the 2021 budget, the procedure until a new government is formed that can agree a 2022 budget.

Interim results from drilling the exploration well XF-002 indicate 1.5-2 Tcf of raw gas in place.

Saudi Arabia discovered natural gas fields in four regions

Middle East oil drilling has still not 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.

Gas drilling is starting to show a moderate recovery, supported by the beginning of Qatar’s LNG expansion projects.

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 move forward).

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