Al Majal Updates

We were very happy to participate as an exhibitor for the first time at this year’s Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC), which took place in November. It was great to be amongst a select few Iraqi energy services companies to exhibit in the event. We had the opportunity to highlight our growing service offerings to the energy sector in Iraq

Al Majal had the pleasure of hosting an afternoon with Basra’s Children Orchestra at the Al Majal Business Park – Burjessia (AMBP). The event took place during part of our company team retreat, starting with an amazing performance by the Orchestra, and followed by a dinner at Al Majal Bean.


Al Majal’s Oil & Gas Market Roundup in Collaboration with Qamar Energy

The country’s economy is gradually recovering from the double oil and CoVid-19 shocks of 2020. In H1 2021, Iraq’s GDP grew by 0.9% y-o-y. Iraq’s non-oil economy grew over 21% in H1 2021 following a solid performance in the services sectors along with the easing of containment measures, a pick-up in vaccination rollouts and a decline in infection rates. The non-oil economy recovery outpaced the slowdown in the oil sector, which was down by 10% in H1 2021 as the country attempted to meet its OPEC+ compliance obligations.

Key Iraq Events – Oil

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. So far, the Iraqi Finance Ministry sent two budget transfers of US$ 138 M on July and August to the KRG this year.

Iraq’s October oil production edges lower at 4.30 Mb/d, down from September’s 4.34 Mb/d according to Iraq Oil Report. Federal Iraq accounted for 3.86 Mb/d of total production, just below the 3.98 Mb/d average in September, while KRG fields produced 437 kb/d, declining in recent months.
Iraq’s nationwide oil exports fell slightly to 3.523 Mb/d in October, down 21 kb/d from September levels. In fact, federal exports increased to 3.12 Mb/d in October from 3.081 Mb/d in September, while KRG exports fell from 463 kb/d in September to 403 kb/d in October due to tanker loading timings.

Iraq appointed KPMG to audit financial movements surrounding a US$ 10 B oil-for-infrastructure deal signed between Iraq and China in 2019. The Sinosure framework agreement became effective in October 2020
On 9th November, Iraq’s Council of Ministers approved INOC to directly negotiate with US firm Chevron on the development of oilfields in the Dhi Qar province, potentially boosting capacity by 600 kb/d.

American investment firm Twelve Seas and UK’s Wood Group are joining US oil services giant Halliburton to bid for ExxonMobil’s stake in West Qurna-1. Twelve Seas will fully fund the acquisition and future proportional development of the field, which will be operationally managed by Halliburton.

Key Iraq Events – Gas

Amid plans to limit reliance on Iranian energy imports, Iraq is in talks with Saudi Aramco for a multi-billion gas deal covering energy, power and petrochemical contracts.

The ministry of oil aims to stop gas flaring at its oilfields by 2027, as the country represents the second largest flaring country globally after Russia, with about 40% of production flared.
Shell is in talks with Iraq’s oil ministry to expand its gas capacity, taking Basrah Gas Company (BGC)’s capacity to 1.6 Bcf/d.

Key Iraq Events – Renewable Energy

Iraq seeks to raise the share of clean energy to 33% by 2030 building on solid expansion in solar capacity, according to the country’s oil minister. The plan is to develop 12 GW of installed solar capacity by the end of the decade.

Key Iraq Events – Politics

Though Iraq’s recent national parliamentary elections in October marked a hard-won success for the country, they instigated a fresh wave of violent demonstrations
The Ministry of Finance said it is working on preparing legislation for the 2022 budget, which was supposed to be approved the on the 1st of October.

Top Energy Deals in the Region

Italy’s Eni made three oil and gas discoveries in Egypt’s Western Desert, with potential for up to 50 Mbbl of oil equivalent reserves.
The Kuwait Oil Co. (KOC) plans to invest more than US$ 6.1 B in exploration and production over the next five years, up to 4 Mb/d by 2040.

Regional Rig Count (1): OPEC+ Pressure to Keep Iraq Rig Count Low