Iraq 4th Bidding Round: New Opportunities for IOCs

Thursday, May 12 2011 by
5
Iraq 4th Bidding Round New Opportunities for IOCs

Iraq is one of the few countries where a high volume of reserves remains yet resources have vastly been under exploited. Although Iraq ranks highly as an oil producer, major fields are yet to reach their expected peak production rates and only a few fields are in development.  In early 2011, the Iraq Oil Ministry announced a fourth licensing round. Included in the round are twelve licenses that were not previously on offer in the provinces of Najaf, Karbala, Samawa, Diwaniya and Anbar. The fourth license round is on track with the ministry’s plan to pursue unexploited reserves. Development of infrastructure will be needed in order for Iraq to achieve a target production capacity of almost 12 million b/d by 2017. 

The Iraq oil industry has of course been heavily hit by U.S sanctions, war and weak infrastructure. At the end of 2010, the United States voted to lift sanctions against Iraq opening the country up to foreign investment. The last few years have seen the Iraq Oil Ministry pursue an ambitious development program to develop fields and increase production. There have been three license rounds in Iraq since 2008 and twelve contracts were signed with International Companies (IOCs). A two phased development is being pursued in which current producing fields are being developed to maximize their potential, followed by the development of non-producing fields. 

Megaprojects 

Terms of the contracts on offer by the Iraq Oil Ministry are by no means favourable (service contracts in which companies earn a fee for each barrel of oil produced) but the appeal of high prospective reserves has so far held the interest of IOCs. The first phase to boost current production sees the involvement of various IOCs in three major fields. The table below shows a list of the fields awarded in June 2009, ownership, remaining reserves, current production, and the 2017 expected crude production capacity. 

Asset Name Operator Asset Ownership Reserves Crude/NGL - Remaining (mln bbls) -   Crude Oil Production (000 b/d) -   Estimated Capacity - Crude/NGL (000 b/d) -  
2009 2010 2017

Unlock this article instantly by logging into your account

Don’t have an account? Register for free and we’ll get out your way

Disclaimer:  

As per our Terms of Use, Stockopedia is a financial news & data site, discussion forum and content aggregator. Our site should be used for educational & informational purposes only. We do not provide investment advice, recommendations or views as to whether an investment or strategy is suited to the investment needs of a specific individual. You should make your own decisions and seek independent professional advice before doing so. The author may own shares in any companies discussed, all opinions are his/her own & are general/impersonal. Remember: Shares can go down as well as up. Past performance is not a guide to future performance & investors may not get back the amount invested.


Do you like this Post?
Yes
No
5 thumbs up
0 thumbs down
Share this post with friends



Royal Dutch Shell plc (Shell) is an independent oil and gas company. The Company explores for crude oil and natural gas across the world, both in conventional fields and from sources, such as tight rock, shale and coal formations. The Company is engaged in the principal aspects of the oil and gas industry in approximately 70 countries. The Company operates in three segments: Upstream, Downstream and Corporate. The Company's Upstream segment focuses on exploration for new crude oil and natural gas reserves and on developing new projects. Its Downstream segment focuses on turning crude oil into a range of refined products, which are moved and marketed around the world for domestic, industrial and transport use. The Company sells various products, which include gasoline, diesel, heating oil, aviation fuel, marine fuel, liquefied natural gas (LNG) for transport, lubricants, bitumen and sulfur. It also produces and sells ethanol from sugar cane in Brazil. more »

LSE Price
1685p
Change
1.8%
Mkt Cap (£m)
129,149
P/E (fwd)
16.4
Yield (fwd)
7.7

BP p.l.c. is an integrated oil and gas company. The Company provides its customers with fuel for transportation, energy for heat and light, lubricants to keep engines moving and the petrochemicals products used to make everyday items as diverse as paints, clothes and packaging. The Company operates through three segments: Upstream, Downstream and Rosneft. Its Upstream segment is engaged in oil and natural gas exploration, field development and production; midstream transportation, storage and processing, and the marketing and trading of natural gas, including liquefied natural gas (LNG), together with power and natural gas liquids (NGLs). Its Downstream segment is engaged in refining, manufacturing, marketing, transportation, and supply and trading of crude oil, petroleum, petrochemicals products and related services to wholesale and retail customers. Rosneft is an oil company, which has a resource base of hydrocarbons onshore and offshore. more »

LSE Price
366p
Change
2.3%
Mkt Cap (£m)
66,715
P/E (fwd)
20.4
Yield (fwd)
7.6

Gulf Keystone Petroleum Limited (Gulf Keystone) is a holding company, which is engaged in the oil and gas exploration and production. The Company operates in the Kurdistan Region of Iraq and the Republic of Algeria. It operates through segments, including Kurdistan Region of Iraq, United Kingdom and Algeria. The Kurdistan Region of Iraq segment consists of the Shaikan, Akri-Bijeel, Sheikh Adi and Ber Bahr blocks and the Erbil office, which provides support to the operations in Kurdistan. The United Kingdom segment provides geological, geophysical and engineering services to the Company. The Algerian segment consists of the Algiers office and the Company's operations in Algeria. It operates in the Shaikan oil field. The Shaikan block is situated over 85 kilometers northwest of Erbil, covering an area of over 280 square kilometers. It operates in the Republic of Algeria and focuses on acquiring exploration and appraisal rights in approximately six blocks and over two producing fields. more »

LSE Price
4.9p
Change
6.5%
Mkt Cap (£m)
47.4
P/E (fwd)
n/a
Yield (fwd)
n/a



  Is Royal Dutch Shell fundamentally strong or weak? Find out More »


5 Comments on this Article show/hide all

lowersharpnose 13th May '11 1 of 5
2

Where did you get 10.8 Bbbls for Shaikan?

Gulf Keystone used a P10 figure of 10.8 B bbls for Oil In Place at Shaikan in their last relevant RNS.

Did you use this figure by mistake or are we due some monster news?

 

lsn

 

| Link | Share
EvaluateEnergy 16th May '11 2 of 5
2

The figure in the table was meant to have a cell note attached which did not appear on the blog. The figure pulled by the analyst was the updated P10 oil-in-place value as stated in an April 14 press release (http://www.rigzone.com/news/article.asp?a_id=106144). As you mentioned the field is in early stages of appraisal so we have put in the resource estimate as an indication of where reserves could stand when a full reserves evaluation is complete. I have updated our blog to show a value of 4900 mln bbl which is the estimated P90 value as stated in the press release with an explanation of the resources estimates.

Company: Evaluate Energy
| Link | Share | 1 reply
lowersharpnose 16th May '11 3 of 5
1

Again, the 4.9 Bbbls is a P90 Oil In Place, not reserves (which is the column heading in your table)..

Presumably you are counting on a lot more oil being found at Shaikan.

| Link | Share
ManSiarad 16th May '11 4 of 5
1

I must confess that it seems rather odd to me that an article on 'New opportunities for IOCs' in Iraq doesn't mention Kurdistan once (apart from saying that the 'KRG' has a stake in one field.

Nor is there any mention of the difficulties arising out of the dispute between Baghdad/Ministry of Oil and the KRG on validity of contracts signed by the KRG.

Or a complete list of agreements in Kurdistan. The Dana Gas consortium is producing (gas), of course.

Since the focus is on the new licencing round (in iraq excluding Kurdistan), why include GKP and DNO, anyway?

All a bit of a muddle, IMO

| Link | Share
abbey8 30th Oct '11 5 of 5

In reply to EvaluateEnergy, post #2

Iraq is a target for a bright future to the oil companies , but NOT north of iraq , risky in term of permission from central iraqi goverment.

| Link | Share

What's your view on this article? Log In to Comment Now

You can track all @StockoChat comments via Twitter


About EvaluateEnergy

EvaluateEnergy

Evaluate Energy is a provider of up to date and accurate oil and gas analysis for industry professionals. 



Stock Picking Tutorial Centre



Let’s get you setup so you get the most out of our service
Done, Let's add some stocks
Brilliant - You've created a folio! Now let's add some stocks to it.

  • Apple (AAPL)

  • Shell (RDSA)

  • Twitter (TWTR)

  • Volkswagon AG (VOK)

  • McDonalds (MCD)

  • Vodafone (VOD)

  • Barratt Homes (BDEV)

  • Microsoft (MSFT)

  • Tesco (TSCO)
Save and show me my analysis
Foliobuilder