Thread: Archive Latest News - Think Tank - 16/08/07 - 03/11/07

Iraq seeks oil output of six million bpd within decade

9 hours ago

DUBAI (AFP) — War-torn Iraq seeks to raise oil production to three million barrels per day (bpd) next year and to six million bpd within a decade, Iraqi Oil Minister Hussein Shahristani said on Saturday.

The plan is to hike output "from just under 2.5 million bpd (now) to three million bpd by 2008 and 3.5 million bpd by the end of 2009," he told industry executives and experts at the start of an "Iraq Petroleum 2007" conference in the United Arab Emirates.

Iraq looks to then increase crude production "to four million bpd in the short term and six million bpd in the medium term," or about 10 years, Shahristani said.

Shahristani said that to reach its targets, Iraq needed to improve the oil infrastructure by building a new eastern pipeline and export pipelines through neighbouring countries, in addition to new oil terminals south of the existing Basra terminal.

Iraq's oil production has been hit by decades of under-investment in infrastructure, including during 13 years of UN sanctions, and rampant insecurity since the US-led invasion of 2003.

"Some 50 discovered fields await developers," Shahristani said.

Shahristani said a controversial oil bill that must be approved by the Iraqi parliament need not wait for possible amendments to the constitution adopted in October 2005.

"Constitutions can always be amended... We don't feel that any law... should be delayed waiting for constitutional amendments," he said.

Shahristani said he did not believe that most members of Iraq's parliament accept the argument that the oil legislation must wait for changes in the constitution.

The Shiite-led government of Prime Minister Nuri al-Maliki passed the oil bill in July.

The bill, seen by Washington as one of the key factors to help end sectarian bloodshed in Iraq, lays down control of the country's vast oil wealth and how it would be distributed across the communities in the 18 provinces.

Iraq's oil reserves are largely in the Kurdish north and the Shiite south. Sunni Arabs from the central and western regions fear they could be robbed of the revenues from the crude exports.

But the Kurds also are concerned at the contents of the bill as a number of foreign companies have already entered into contracts with the northern Kurdish government to explore for oil in that region.

Kurds fear these contracts could be terminated after Shahristani said in May that any contract signed before the adoption of the law would be cancelled.

AFP: Iraq seeks oil output of six million bpd within decade

UPDATE 1-Iraq sees oil output at 3.5 mln bpd by end 2009

Sat Sep 8, 2007 1:06PM BST

DUBAI, Sept 8 (Reuters) - Iraq plans to raise crude oil production to 3.5 million barrels per day by the end of 2009 and and will build pipelines to supply oil and gas to Syria and Iran, Oil Minister Hussein al-Shahristani said on Saturday.

Shahristani told reporters that Iraq would supply Syria with 50 million cubic feet of gas a day and Iran with 100,000 bpd of crude through pipelines that would be built in the coming year.

The tender to build the Iraqi side of the small pipeline to Deir al-Zour in eastern Syria would be launched in September, Shahristani said on the sidelines of a conference in Dubai.

He said the deal with Iran would involve building a pipeline from Iraq's southern city of Basra to Iran's Abadan refinery.

Overall, the OPEC producer sees its crude output rising to 6 million bpd over the next 10 years from 2.5 million now, but its plans depend on the security situation.

Sabotage has plagued Iraq's oil sector since the U.S.-led invasion of 2003 sparked an insurgency and the country, which has the world's third-largest oil reserves, has not been able to raise production to pre-war levels of almost 3 million bpd.

Shahristani said he did not expect the withdrawal of British troops from southern Iraq to expose facilities in the region, home to most of the country's oil reserves, to more attacks.

"The pullout of the British troops has no impact on oil facilities because they were not protecting these installations. This is the responsibility of the ministry of oil," he said.

"We see a substantial increase in oil and gas resources and a doubling of oil production."


OIL LAW

Growth also hinges on a long-awaited federal hydrocarbons law that aims to unlock billions in potential foreign investment by setting ground rules for operation.

The controversial bill has been approved by the Iraqi government after months of talks but has yet to be debated by parliament, which returned this month from its summer break.

International oil companies are reluctant to enter Iraq until a legal framework for the energy sector is in place.

Shahristani reiterated comments by other Iraqi officials that the oil law would be passed "within a few weeks", though many disagreements over the fine print persist.

He said the bill would allocate all 27 existing producing fields to the new Iraqi national oil company, along with a similar number of nearby discovered but not producing fields.

Another 26 discovered fields that are further away from production centres will be opened up to international oil companies along with around 65 exploration blocks, he said.

Iraq hopes to raise proven oil reserves by over a third through exploration "to change non-potential reserves that stand at 214 billion barrels to proven reserves, adding 43 billion barrels to the existing 115 billion barrels", Shahristani said.

The plan involves drilling 2,000 new production wells and the development of new fields, he said.

Iraq also wants to raise gas production to 4.7 trillion cubic metres from 3.1 trillion cubic metres, the minister said.

However, many international oil company executives have cast doubts on Iraq's ability to meet those growth targets given the political wrangling over the oil law and continued instability.

UPDATE 1-Iraq sees oil output at 3.5 mln bpd by end 2009 | Markets | Reuters

I just thought I would post this as it specifically says not to in the USA.


Addax Petroleum Announces Update to Continued Appraisal Program at Taq Taq

Not for Release, Publication or Distribution in or Into The United States, Australia or Japan

Second Step-Out Appraisal Well TT-07 Flows at an Aggregate Rate of 37,560 Barrels Per Day


CALGARY, Canada, September 6 /PRNewswire-FirstCall/ -- Addax Petroleum Corporation ("Addax Petroleum" or the "Corporation") (TSX: AXC, LSE: AXC) today announced flow test results for the TT-07 well, the fourth appraisal and development well recently drilled on the Taq Taq field by Taq Taq Operating Company, the joint venture company formed by Genel Enerji A.S.("Genel") and Addax Petroleum to carry out the petroleum operations in the Taq Taq license area.

Three reservoir intervals were tested separately and flowed at an aggregate rate of 37,560 bbl/d of light oil, measured gravity of 48 degrees API with low gas oil ratio. The intervals tested were a 232 meter bare foot completion interval in the Shiranish formation which flowed at a rate of 10,240 bbl/d, a 111 meter interval in the Komet an formation which flowed at a rate of 10,250 bbl/d and a 53 meter interval in the Qamchuqa formation which flowed at a rate of 17,070 bbl/d. Oil flow rates from the Shiranish, Kometan and Qamchuqa intervals were restricted by 128/64", 76/64" and 128/64" choke sizes respectively. Evaluation of these flow test results is ongoing.

Commenting on the well results, Dr. Ashti Hawrami, the Minister of Natural Resources for the Kurdistan Regional Government said: "We are delighted by these results, as they demonstrate the high production potential of the Taq Taq field. We congratulate our Turkish partners (GenelEnerji) and Canadian partners (Addax Petroleum) on these excellent results. We also congratulate the people of the Kurdistan Region and all of Iraq. With this good news, Taq Taq will become the first major contributor in the Kurdistan Region to the increase of revenues for all Iraqi people. The KRG will continue its efforts in the development of the Region's oil resources to meet our stated target of 1,000,000 barrels per day within the next five years."

Commenting, Jean Claude Gandur, President and Chief Executive Officerof Addax Petroleum said: "The success of our appraisal program at Taq Taqcontinues to be very encouraging. The TT-07 well is significant because, in addition to being another successful step-out appraisal well, it tested at the highest aggregate flow rate of any Taq Taq well to date including having the highest single formation flow rate. We are integrating these additional results, together with the ongoing 3D seismic campaign, into a full development program for the Taq Taq field. We are also encouraged that recent constructive efforts of the Kurdistan Region and Iraq could result in a legal framework that will enable the Corporation to commence implementing this full field development in 2008."

TT-07 is a step-out well located approximately 2.9 kilometres southeast of the TT-04 well, which was located on the crest of the Taq Taq field. It is the second well which is attempting to define the length-wise a real extent of the Taq Taq structure approximately 6 kilometres in the opposite direction of the crest of the field from TT-06. The TT-07 well was spudded in late April and completed drilling in early July at a total depth of 2,187 metres. Testing of TT-07 commenced in mid August, 2007.

Interpretation of data acquired from TT-07, including wireline and 36 metres of core, confirmed the presence of a significant and extensive fracture system as observed in the TT-04, TT-05 and TT-06 wells in the tested formations. The Shiranish interval in the TT-07 well was acid stimulated.

The TT-07 well is the fourth of a six well drilling and seismic appraisal program by Genel and Addax Petroleum. The drilling of the fifth and sixth appraisal and development wells, TT-08 and TT-09, are now in progress. The TT-08 well was spudded in mid-July and is located approximately 1.7 kilometres east of the TT-04 well along the width-wise axis of the Taq Taq field. In addition to the ongoing drilling program, Genel and Addax Petroleum have commenced shooting 290 square kilometres of 3D seismic over the Taq Taq field and expect to complete the acquisition early in the fourth quarter of 2007. The results of the drilling and seismic appraisal program will be integrated into a full field development plan which Genel and Addax Petroleum expect to commence implementing in 2008. Genel and Addax Petroleum also are finalizing the acquisition of 175 kilometres of 2D seismic over the Kewa Chirmila prospect and surrounding area, which is in the same license area as the Taq Taq field.

The Taq Taq field is located in the Kurdistan Region of Iraq some 60 kilometres northeast of Kirkuk, 55 kilometres southwest of Erbil and 120 kilometres northwest of Sulaimaniyah.

http://www.prnewswire.com/cgi-bin/st...04657477&EDATE=

Iraq Kurdish Region Signs Oil Deal With U.S. Hunt

The government of Iraq's Kurdish region said it had signed a gas and oil production sharing contract.

The government of Iraq's Kurdish region said on Saturday it had signed a gas and oil production sharing contract with a unit of U.S.-based Hunt Oil Co. and with Impulse Energy Corp.

The deal covers exploration activity in the Dihok area, and Hunt Oil Co. of the Kurdistan Region will begin geological survey and seismic work by the end of 2007 and has plans to drill an exploration well in 2008, a statement from the Kurdistan Regional Government said.

The statement did not give financial details of the deal, the first such contract since the largely autonomous region passed its own oil law in August, while Iraq's parliament failed to pass a national law after months of negotiations.

The regional government signed five production sharing agreements earlier with foreign companies.

Iraq has the world's third-largest oil reserves, which are mainly in the north and the south of the country.

http://www.javno.com/en/world/clanak.php?id=78922

Iraq Parliament Gears Up To Pass Key Draft Laws

Baghdad: The Iraqi parliament is preparing to debate controversial draft laws on oil and gas, accountability, justice, resources and the provinces.

According to Salim Abdullah, a member in the Sunni Accord Front, the parliament will approve the Accountability and Justice Laws concerning the return of the Baathists to senior administrative and military positions, in addition to the Provinces Law that will regulate this week's provincial elections that is a significant step towards forming federal regions in Iraq.

Abdullah added: "The Oil and Gas and the Resources Laws will be subjected to some [amendments and] yet it is likely that the laws will be approved by the parliament because of some understandings between [major] political blocs inside the parliament to legislate the laws."

'Will incite factions'

The Association of Muslim Scholars, a Sunni religious authority, and Khalaf Al Alian from the Accordance Front issued statements warning against ratification of the laws because it would incite factions.

Sources in the Shiite coalition said that US President George W. Bush urged Iraqi leaders to speed up the ratificaton of oil and gas, accountability, justice, resources and the provinces laws during his last visit to Al Anbar.

Muna Kuba, a researcher in economic affairs at Baghdad University, told Gulf News: "There is US pressure on Iraqi leaders to pass some laws [that will favour] American political and economic interests in Iraq. I believe that Americans seek to create [an environment] to assure them of higher profits before investing in Iraq's oil sector, the largest oil reserve in the world."

After the formation of the Shiite-Kurdish Coalition besides the Sunni Islamic Party, political observers in Baghdad believe that ratification of the laws will not face strong opposition.

Waleed Abdul Sahib, a member of the Shiite Dawa Party led by Prime Minister Nouri Al Maliki, told Gulf News: "I think we must have a political consensus in the parliament to pass the laws, [which are] important to promote the reconciliation process."

Sahib added: "The government should [make] Iraqi citizens [aware] that these laws will ensure justice to each Iraqi city and that every Iraqi will have his or her share of natural resources. ... the problem [lies] in media inside and outside Iraq which described the laws as illegal [without] being aware of the nature of the ... laws."

http://www.gulfnews.com/region/Iraq/10152416.html

Texas oil company signs production sharing deal with Kurds

Published: September 8, 2007

HOUSTON: Texas' Hunt Oil Co. and Kurdistan's regional government said Saturday they have signed a production-sharing contract for petroleum exploration in northern Iraq, the first such deal since the Kurds passed their own oil and gas law in August.

A Hunt subsidiary, Hunt Oil Co. of the Kurdistan Region, will begin geological survey and seismic work by the end of 2007 and hopes to drill an exploration well in 2008, the parties said in a news release. Terms of the deal were not disclosed.

Hunt is a privately held independent oil company based in Dallas, Texas. A third partner, Impulse Energy Corp., also has a stake in the project.

"We're very pleased to have the opportunity to be a part of these landmark events by actively participating in the establishment of the petroleum industry," Ray L. Hunt, Hunt's CEO, said in a statement.

Revenue will be shared by the KRG throughout Iraq, consistent with the Iraq constitution and the Kurds' new petroleum law, issued by the Kurdistan National Assembly early last month.

De****e Iraq's vast oil reserves, major international companies have sat on the sidelines, not only for security reasons but because of the absence of legislation governing the industry and offering protection for investments.

A draft oil law for all of Iraq has been bogged down for months, in part because of disputes over who will control the proceeds.

In August, however, the Kurdish self-governing region in northern Iraq enacted its own law governing foreign oil investments. The move angered the central government in Baghdad, but the Kurds are determined to push ahead with oil exploration.

Ashti Hawrami, the regional government's minister of natural resources, said in a statement that the signing by Hunt is evidence the government's new oil and gas law has created "a supportive and transparent business environment which promotes investment by international oil companies in our region for the benefit of all."

Texas oil company signs production sharing deal with Kurds - International Herald Tribune

Bush to address US on Iraq next week

The US President George W. Bush said on Saturday he would make a speech, expected next week, to defend his strategy in Iraq and urge the war-weary US public to rally behind it.

"I will discuss the changes our strategy has brought to Iraq. I will lay out a vision for future involvement in Iraq -- one that I believe the American people and their elected leaders of both parties can support," he said.

Bush recorded his weekly radio address from Sydney where he was attending a meeting of Asia-Pacific leaders. Bush said he would speak after the US commander in Iraq, General David Petraeus, and the US ambassador to Baghdad, Ryan Crocker, testify to the US Congress on the trends in the strife-torn country.

Petraeus and Crocker were to speak to lawmakers ahead of a September 15 progress report from the White House to Congress amid renewed questions about the reliability of official US data about issues such as civilian deaths in
Iraq.

Media reports suggested that the unpopular president would deliver his speech on Thursday.

http://economictimes.indiatimes.com/...ow/2350087.cms

It’ll take time to reopen Syria pipeline: Iraq

Iraqi Oil Minister Hussein Shahristani conceded yesterday that it would take time to reopen an oil export pipeline to the Syrian coast that has been shut since the US-led invasion of 2003.

“We will rehabilitate the western pipeline that goes through Syria. However, there is damage... Terrorists have been attacking it,” Shahristani told reporters on the sidelines of an industry conference in Dubai.

“Significant portions have to be replaced... We have agreed with the Syrians to inspect it... But that will take some time,” he said.

The pipeline, which runs from Iraq’s northern oilfields to Baniyas on Syria’s Mediterranean coast, only reopened in November 2000 after an 18-year closure following Syria’s support for Iran in its 1980-88 war with Iraq.

It was closed again after the US-led invasion.

Syrian Oil and Mineral Resources Minister Sufian Allaw was quoted in the Syrian press last month as saying that the two countries had agreed to rehabilitate and reopen the pipeline.

The agreement was one of several reached between the two neighbours during a landmark visit to Damascus by Iraqi Prime Minister Nuri Al Maliki.
Shahristani said the two countries had also agreed to build a gas pipeline linking Iraq’s western Akas field to a treatment plant in Syria’s eastern city of Dayr Az-Zawr.

The Peninsula On-line: Qatar's leading English Daily

Baghdad to let foreign firms develop oilfields --------------------------------------------------------------------------------

http://www.gulf-daily-news.com/Story...&IssueID=30173
Baghdad to let foreign firms develop oilfields

DUBAI: Iraq will issue tenders for international oil companies (IOCs) to develop its existing fields this year, even if a long-awaited new law to regulate the energy sector is delayed, Oil Minister Hussein Al Shahristani said.

"Although we have been waiting for this new law for political reasons, if it is delayed we will go ahead and start discussions with IOCs, especially in current fields to increase production levels," he told an oil conference in Dubai yesterday."There is no legislation vacuum. There is a prevailing law, which authorises us to carry out any field development contract.

This we will be pursuing and you will see shortly the tendering calling for IOCs to work with us to develop current fields in addition to a gas masterplan," he said.

Asked how soon the tenders would be issued, Shahristani said "well before the end of the year."

Shahristani said last month that Iraq would call an open race for around a third of Iraq's prized fields in September, but only once the new federal oil law was passed.

Now it seems the tenders will be issued with or without the new law, which will decide how Iraq's third-largest proven oil reserves will be shared out and has been mired in political bickering.

A draft bill was approved by the Iraqi government in July after months of talks but has yet to be debated by parliament, which returned this month from its summer break.

Shahristani reiterated comments by other Iraqi officials that the oil law should be passed "within a few weeks", but many disagreements over the details persist.

The Kurdistan Regional Government has already forced the renegotiation of the bill and international oil executives privately say they are wary about entering Iraq before the new legal framework for the energy sector, which provides over 90 per cent of Iraqi government revenue, is in place.

Shahristani said the delay in the law would not delay plans to develop the sector, which is in dire need of investment after a decade of sanctions and four years of violence since the US-led invasion of 2003.

"Iraq has an oil law. It has always had one and it is the prevailing law until the new one is legislated. The ministry of oil can sign any contract to develop capacity and increase oil production," he said. "This is needed for the reconstruction

Iraq to open oil sector to all foreign firmsNICOSIA, Sept 8: A former Iraqi oil minister says the future development of the country’s rich oil reserves will include a wide range of foreign companies, and not just US contractors.

Thamir Ghadhban told the Middle East Economy Survey (MEES), a Nicosia-based spe******t industry newsletter, that when the competition for contracts begins, foreign oil companies will have to form a consortium to enter the bidding.

“We believe in the benefits of diversification,” Ghadhban said in the interview.

“We want the maximum number of international oil companies to work in Iraq to help in providing technical expertise and management skills and financial capabilities, but also to help in enhancing the strategic balance of Iraq.”

After the US-led invasion of Iraq in 2003, many observers assumed that US firms would automatically win most oil development contracts, MEES said.

Ghadhban is a leading candidate to head the Iraq National Oil Company, set to be re-established once a draft oil law receives parliamentary approval. The INOC will most likely be a partner in a consortium with the foreign firms.

Unlike most state oil companies, however, the INOC “will not have a monopoly on Iraqi land in terms of exploration,” Ghadhban said.

Iraq’s oil infrastructure has been hit by decades of under-investment as a result of successive Gulf wars, 13 years of UN sanctions and the rampant insecurity that followed the US-led invasion in 2003.

Washington regards passage of the controversial oil legislation as key to efforts at national reconciliation in the country which is wracked by an insurgency and sectarian violence.

But the measures to loosen state control of Iraq’s main natural resource have drawn strong opposition from nationalists and left-wingers who charge that the US is abusing its military presence to plunder the country, which holds the world’s third-largest proven reserves of crude.

Ghadhban said he hoped that the oil law would be approved soon.

“What I have been hearing and (after) counting numbers, I think the law has a good chance of being passed,” he told the newsletter, while adding that in the end the decision was up to the Iraqi lawmakers.While waiting for the approval, Iraqi oil officials have been doing some preparatory work on identifying oil fields and gathering data for the eventual licensing round.

Ghadhban said he estimated contracts could be awarded in a year’s time.

“Let us say within a year. If you take other countries’ experiences of bid rounds, they usually take some time,” he said.


Iraq to open oil sector to all foreign firms -DAWN - Business; September 09, 2007