Rosneft expands in Iraq's Kurdistan with exploration, pipeline deals

St. Petersburg (Reuters)—Russian oil major Rosneft has agreed to explore and develop five fields in Iraq's Kurdistan as the company seeks to become a key player in one of the world's newest and fastest-growing oil provinces.

Kremlin-controlled Rosneft this year became the first oil major to pre-finance Kurdish crude exports, an activity long dominated by trading houses, which bankrolled the semi-autonomous region amid its fight against Islamic State and a budget crisis caused by low oil prices.

On Friday, Rosneft and the Kurdistan government signed production-sharing deals for five oil blocks, with Rosneft saying it would also aim to explore for gas in the future.

Igor Sechin, Rosneft chief executive and a close ally of Russian President Vladimir Putin, said the company was widening cooperation with Kurdistan following the first direct purchases of Kurdish oil for Rosneft's German refineries earlier this year.

Increased feedstock access. "The agreements...set an example of well-weighed investments in one of the key Middle East regions, which will make it possible for the company to expand its exploration and production geography, provide feedstock for Rosneft's growing refining network and raise profitability of our international assets," Mr. Sechin said.

Iraq has long opposed Kurdish independent oil sales, but has lately eased its stance amid joint efforts by the regional government and Baghdad to defeat Islamic State.

Rosneft and Kurdistan also said they had agreed on the "monetization of the export oil pipeline in Kurdistan," with Rosneft getting access to the regional transportation system, which has throughput capacity of 700 Mbpd.

By the end of 2017, Kurdistan plans to expand the pipeline to 1 MMbpd, or 1% of global output, betting on the arrival of new volumes from fresh developments.

Kurdish oil production has been mainly led in recent years by mid-sized firms, including Genel. Larger companies such as ExxonMobil and Chevron are still in the exploratory stage and have recently returned some blocks to Kurdistan after disappointing searches.

Rosneft said the deals signed would allow it to talk about "full entry in one of the most promising regions of the developing global energy market.” Kurdistan estimates its recoverable reserves at 45 Bbbl of oil and 5.66 Tm3 of gas.

Source: www.oilpro.com

Iraq moving forward with gas processing plant construction

Iraqi oil minister Jabar al-Luaibi announced a plan for the oil rich country to begin construction on three natural gas processing plants. Natural gas in the country is currently being flared at southern oil fields due to the lack of facilities needed to capture and process it into usable fuel.

This plan will hopefully increase the nation's income from energy exports while also adding resources aiding in power generation nation wide. Luaibi touched on some of the challenges in an emailed statement, "the ministry is seeking to end the flaring of associated gas in the next few years, despite the economic and financial challenges."

Once the plants are up and running, Iraq's natural gas output will potentially triple to 1,700 million cubic feet per day by 2018.

As OPEC's second largest crude producer, Iraq is hoping to add to its oil and gas income that already accounts for almost all of its public budget.

After crude dropped in 2014, Iraq has struggled to pay its bills. Also in 2014, the Islamic State seized close to a third of Iraqi territory.

Source:www.oilpro.com

Iraq & Iran Signs MOU for Joint Cooperation

Mr. Jabbar A. Allibi the minister of oil signed a memorandum of understanding with his Iranian counterpart Mr. Beigin Zangana to establish joint committees to finish some of the important cases.

Such as: the case of the joint fields between the two countries in order to invest these fields perfectly, the committee of studying the capability of extending the Iraqi crude oil pipeline from Kirkuk through the Iranian lands, and the committee of studying the transportation of the Iraqi oil from Basra to Abadan.

The memorandum stated also to continue the cooperation in the sector of supplying the power stations with the Iranian gas, inviting the Iranian companies to invest in the oil & gas sector, and rehabilitating the infrastructure of the oil & gas facilities in addition to the petrochemicals factory in Basra.

Iran shown its readiness to grant scholarships to the Iraqi students in the oil specializations.

Mr. Allibi "after the end of discussions" said that they was positive and fruitful because the two sides was keen to activate the horizons of cooperation between the two countries to serve the joint benefits. In addition to the coordination of the attitudes in OPEC to achieve the demanded balance in the global oil market in order to support the prices.

Mr. Zangana said that the two sides held an extended meeting to discuss the common concern issues which are related with the development of the oil & gas industry and the border oil fields, as well as the implementation of many strategic important projects to strengthen the opportunities of cooperation between the two countries. He also was comfortable for the elevation of the oil prices in the global market after the resolution of OPEC to cut the production.

It is worthy to mention that the Iranian minister Mr. Beigin Zangana visited Baghdad for one day with a high class delegation. And was received by Mr. Allibi the minister of oil and many responsible members from the ministry of oil.

Source: http://www.gulfoilandgas.com