THE Iraqi Oil Thread pt 2 (merged)

[OilFinder2]

Iraqi oil production has been going up, but not by enough to make the price of oil drop by 70% all by itself.


Source

There's a thread on Iraqi oil here.

[OilFinder2]

Some more goodies being auctioned off, in addition to the ones already auctioned off earlier this year.

--> LINK <--

Iraq opens oil fields
By allowing foreign investment, the government says production could increase by 2.5 million barrels per day.
December 31, 2008: 7:06 AM ET

BAGHDAD (Reuters) -- Iraq on Wednesday opened up some of its most prized oil and gas fields to international firms that have been excluded for decades, part of new deals that could more than double its output within a few years.

In a second bid round, following on from one earlier this year, Iraq has put forward 11 oil and gas fields, including super giants.

"Under service contracts prepared by the oil ministry, 11 oil and gas fields will undergo complete development," Oil Minister Hussain al-Shahristani told a Baghdad news conference.

Two of the oilfields - Majnoon and West Qurna Phase II - are classed as super giants and between them could produce 1.2 million barrels per day when fully developed.

Shahristani named the other fields as Halfaya, East Baghdad, Gharrafa, Qayara, Najmah, Badrah, Kifil/West Kifil/Mirjan and a group in Diyala province, as well as the Siba gas field in Basra province.

He said the 11 fields could increase production by up to 2.5 million barrels within three to four years of the contracts being completed at the end of 2009. That increase is roughly equivalent to what Iraq produces today.

[...]

[ROCKMAN]

I have no idea what the real reserve potential is for Iraq. I doubt anyone has a credible number at the moment. But let me repeat a point that others have had difficulty accepting: oil/NG is easier to explore for now then ever before. Yes...there are fewer places left undrilled and fewer fields to find. But today's technology is truly Star Trek quality compared to the horse and buggy days many decades ago when Ghawar et al was discovered. Whatever amount of untapped reserves are there will be identified very quickly (assuming no one is shooting at the crews). BTW, it will be mostly the Dutch and French doing the exploration...not US companies. Assuming serious efforts begin in 6 months and go unmolested I would guess most of the big fields will be discovered in 5 to 8 years. The success rate will be truly phenomenal...probably 50% to 70% for the first few years. It will really be the “kid in the candy shop” story.

Whether there's 2 billion bbl of oil or 200 billion we'll have the proof long before the magic date of 2025. If the number really is big then modern completion techniques would certainly delay PO for a while. But that same technology will allow depletion of those fields much quicker then most can appreciate. Then we’ll be right back on that inevitable slope again. Of course, this all assumes compatible above ground factors during this period. Not a bet I would be willing to make right now.

[AirlinePilot]

My prediction is that due to unrest, both political and religious, Iraq will never be able to exploit all that oil to its fullest potential. They will be lucky to grow their production much at all from its current rates anytime in the near future.

[pstarr]

My prediction is that due to unrest, both political and religious, Iraq will never be able to exploit all that oil to its fullest potential. They will be lucky to grow their production much at all from its current rates anytime in the near future.

Why are you so rational here and so god#mned pigheaded on 911?

Just wanna know?

[OilFinder2]

Featured in Business Week.

>>> Business Week <<<

March 26, 2009
Major Oil Companies Are Circling Iraq
With stability returning, Oil Minister al-Shahristani has big plans to make his country the fourth-largest oil producer

With security in Iraq improving, international oil companies are quickly moving in, often with little or no fanfare. Hanter Gasser, Royal Dutch Shell's (RDS) top executive for Iraq, recently spent a week in Basra, site of the country's biggest fields, checking on a joint venture Shell is starting with the Iraqis to find commercial uses for the gas that is flared off during oil production. Gasser says Iraq burns off enough gas to power two countries the size of Jordan.

Shell is one of about 30 oil companies, including ExxonMobil, Chevron, and BP, that are pursuing licensing agreements with Baghdad. Iraq intends to boost production in seven fields holding an estimated 44 billion barrels of reserves, more than a third of its total. Those agreements are supposed to be awarded in a few months. "We have high interest in Iraq, and we are waiting to see the terms," Gasser says. Iraqi oil production, at a low 2.5 million barrels a day, is just where it was before the war. If Iraq produced anywhere near its targeted 6 million barrels a day, it could change the industry's dynamics and curb talk of a looming shortage.

[...]

Anyone wanna bid on one of these?

[MD]

My prediction is that due to unrest, both political and religious, Iraq will never be able to exploit all that oil to its fullest potential. They will be lucky to grow their production much at all from its current rates anytime in the near future.

Why are you so rational here and so god#mned pigheaded on 911?

Just wanna know?

*ahem*...sorry to break it to ya...he's being rational about 911 too.

[AirlinePilot]

If Iraq produced anywhere near its targeted 6 million barrels a day, it could change the industry's dynamics and curb talk of a looming shortage.

Anyone wanna bid on one of these?

NOPE! You still dont seem to understand the meaning of the word "If".

In case you hadnt noticed there's been an abundance of news about the cutbacks
in these very plans due to the crude industry crisis due to price.

As I have said many times here before, I'll believe it only when I see it. It's become very evident to me listening to folks like Rockmann, rockdoc, and one or two other sages in here that actual production and flow rates are a far cry from some proposal or estimate of future production.

I stand by my premise that Iraq will struggle to grow their current levels of production. Just like everyone else.

[AirlinePilot]

My prediction is that due to unrest, both political and religious, Iraq will never be able to exploit all that oil to its fullest potential. They will be lucky to grow their production much at all from its current rates anytime in the near future.

Why are you so rational here and so god#mned pigheaded on 911?

Just wanna know?

*ahem*...sorry to break it to ya...he's being rational about 911 too.

Nice to see some folks were actually paying attention.

[OilFinder2]

In case you hadnt noticed there's been an abundance of news about the cutbacks
in these very plans due to the crude industry crisis due to price.

Not in Iraq, which is what this thread is (supposed to be) about.

I stand by my premise that Iraq will struggle to grow their current levels of production. Just like everyone else.

We shall see. I'll be sure to keep y'all updated.

[AirlinePilot]

I found some good news....cough, cough.....

http://www.voanews.com/english/2009-03-24-voa73.cfm

http://www.upstreamonline.com/live/article174656.ece

[OilFinder2]

I found some good news....cough, cough.....

http://www.voanews.com/english/2009-03-24-voa73.cfm

http://www.upstreamonline.com/live/article174656.ece

That was:

1. An article about the effect of oil price declines on Iraq's military and government budget, not an article about spending on oil projects. If anything, the fall in oil prices will hasten their efforts to get these oil fields developed, because the increased oil revenue they will bring will help their military and government budget.

2. As for your second link I have little doubt they'll eventually work something out. There's too much money at stake for them not to. I'll be sure to keep you posted.

[OilFinder2]

BTW just so you know there's some action going on there (in addition to the BW article) . . .

>>> LINK <<<

Petrobras May Compete for Iraqi Oil Deal
by Hassan Hafidh Dow Jones Newswires Thursday, March 26, 2009

Brazil's state-run oil company Petrobras could join a U.S. firm and two European companies in competing for a contract to develop Iraq's Nahr Bin Umar oil field, a senior Iraqi oil official involved in talks with international oil companies told Dow Jones Newswires Thursday.

"Petrobras had carried out studies on Nahr Bin Umar during the 1970s and the Oil Ministry may invite it for negotiations," the official said.

Earlier this week, an Iraqi oil official said Baghdad had invited a consortium of Total SA and Chevron Corp. to compete against StatoilHydro ASA and a fourth company which he didn't name.

In the 1990s, Total signed a tentative agreement with Saddam Hussein's regime to develop Nahr Bin Umar, but no final deal was signed due to the then economic sanctions.

The field has about 6.6 billion barrels of reserves and a potential production of 440,000 barrels a day.

[...]

But Petrobras will have some tough competition!
>>> LINK <<<

Iraq seeks bids for oil field development
David R. Baker
Wednesday, March 25, 2009

Iraq Ministry of Oil officials have invited Chevron Corp. and two European companies to bid on developing a large oil field near Basra, according to reports Tuesday.

Reuters and the Associated Press, citing unnamed sources at the ministry, reported that San Ramon's Chevron has been invited to submit a bid for developing the Nahr bin Umar oil field in southern Iraq. StatoilHydro of Norway and Total of France have also received invitations to bid on the same field, according to the reports.

Chevron spokesman Kurt Glaubitz said the company would not comment on the reports. Chevron has, however, acknowledged its interest in helping the oil ministry expand production at another oil field nearby - the West al-Qurna field.

[...]

As an example demonstrating that Iraq is eager to please the oil companies . . .

>>> LINK <<<

Iraq Revises Model Contract for International Oil Cos
by Hassan Hafidh Dow Jones Newswires Tuesday, March 24, 2009

The Iraqi Oil Ministry has sent out a revised copy of a model contract for the eight oil and gas fields included in its landmark first bidding round in an effort to accelerate the process of awarding contracts to international oil firms by the end of June, a senior Iraqi oil official said Monday.

"We had sent out to bidding companies on March 19 a semifinal version of the model contract," Abdul Mahdy al-Ameedi, deputy director general at Iraq's Petroleum Contracts and Licensing Directorate, or PCDL, told Dow Jones Newswires by telephone from Baghdad.

[...]

The most important change the directorate had made to the original model contract was that oil firms would have a 75% stake in the joint ventures with state-owned Iraqi operators at the fields holding the rest, he said. That was up from 49-51% equity stake initially proposed.

[...]

Looks like Italy's Eni expects to get a reeeeally big contract . . . We'll see who wins the bid really soon.

>>> LINK <<<

Eni Expects Iraq Nassiriya Decision in April
AFX News Limited Thursday, March 19, 2009

Italy's Eni expects Iraq to award a contract to develop its Nassiriya oil field in April, CEO Paolo Scaroni said on Thursday.

"Iraq is interested in making a decision quickly on this field," Scaroni said on the sidelines of an OPEC energy conference.

"Our priority now is Nassiriya, Eni has been involved in Nassariya for many years," Scaroni said. "It's a super giant field -- we've always been interested."

Scaroni has said the field could produce up to a million barrels per day of oil.

Spain's Repsol and Japan's Nippon Oil also want to develop the field.

Iraqi Oil Minister Hussain al-Shahristani said on Wednesday that Nassiriya's production was expected to reach 100,000 bpd within 18 months.

So much exciting stuff going on!

[JohnDenver]

I couldn't find the original article, but this notion of immense Iraq possessing enormous undiscovered oil reserves seems based entirely on speculation.

In the USGS World Petroleum Assessment 2000, the Assessment Unit (AU) estimated to have the largest amount of undiscovered oil is Cretaceous Reservoirs (AU no.: 20300101) with 74 Gigabarrels (mean).

Cretaceous Reservoirs corresponds to Eastern Iraq/Western Iran:


More details here. If you're genuinely interested, see the USGS report on 20300101. There's plenty of geological data there for you to gag on.

[Starvid]

I've actually met this Mr. Chalabi, and he seemed a clever enough fellow with the heart at the right place. Also gave smart answers to the questions I asked him (about what he felt should be the role of the supermajors on one hand and the international service companies on the other hand in rejuvenating the Iraqi oil industry).

He had some new information about the East Baghdad field (located straight under Sadr City) which he shared with ASPO.

He thought that while OPEC reserves were overestimated, it wasn't the case of Iraqi reserves.

[Graeme]

Major Oil Companies Are Circling Iraq

With security in Iraq improving, international oil companies are quickly moving in, often with little or no fanfare. Hanter Gasser, Royal Dutch Shell's (RDS) top executive for Iraq, recently spent a week in Basra, site of the country's biggest fields, checking on a joint venture Shell is starting with the Iraqis to find commercial uses for the gas that is flared off during oil production. Gasser says Iraq burns off enough gas to power two countries the size of Jordan.

Shell is one of about 30 oil companies, including ExxonMobil, Chevron, and BP, that are pursuing licensing agreements with Baghdad. Iraq intends to boost production in seven fields holding an estimated 44 billion barrels of reserves, more than a third of its total. Those agreements are supposed to be awarded in a few months. "We have high interest in Iraq, and we are waiting to see the terms," Gasser says. Iraqi oil production, at a low 2.5 million barrels a day, is just where it was before the war. If Iraq produced anywhere near its targeted 6 million barrels a day, it could change the industry's dynamics and curb talk of a looming shortage.

http://www.businessweek.com/magazine/content/09_14/b4125070227376.htm?chan=globalbiz_europe+index+page_top+stories

[OilFinder2]

^
That's the article I just posted on the previous page.

[JohnDenver]

Not sure if you've already linked to it, but Big Gav has posted a lot of material on Iraq:

Iraq's Oil: The Greatest Prize Of All ?
How Much Oil Does Iraq Have?

[Graeme]

^
That's the article I just posted on the previous page.

Sorry, I had no intention to steal your thunder.

Now more people can see your earlier post.

[OilFinder2]

Big discovery in Kurdistan. Will add it to my catalog later today.

>>> LINK <<<

Oil and gas firm climbs on discovery news
Heritage Oil’s Miran West estimated oil-in-place of between 2.3 to 4.2 billion barrels
5/6/2009 10:59:48 AM

Shares of Heritage Oil Limited (TSX: T.HOC, Stock Forum) soared 20% to $9.60 on low volume Wednesday morning, after the company reported a significant oil discovery in the Kurdistan Region of Iraq and the completion of an initial test programme on the Miran West-1 well.

The company says the Miran West structure has estimated oil-in-place of between 2.3 to 4.2 billion barrels and the recovery factor is expected to be between 50% to 70% due to the highly fractured nature of the reservoirs.

From the pressure data recorded during testing, management estimates flow rates of between 10,000 to 15,000 bopd per well.

Additional testing equipment is being sourced to undertake a second phase of longer term testing, and the company says that following the upcoming testing programme, the well is scheduled to be suspended as a future producer with the potential to truck crude oil production by year-end 2009.

"This is another significant development milestone for Heritage. The presence of oil in such a large structure with a multi-billion barrel reserves potential illustrates the significance of this discovery. There is also further upside potential with the neighbouring Miran East structure, which together with Miran West has an area of approximately 330 square kilometres. The Miran field has the potential to deliver significant value as it will be a major source of reserve and production growth for Heritage," said Tony Buckingham, the company’s CEO.

[...]