Iraq Acquires New Investments In Its Thriving Oil Sector – – Daily Cryptocurrency and FX News

Iraq Acquires New Investments In Its Thriving Oil Sector – – Daily Cryptocurrency and FX News

After the recent announcements of massive developments in Iraq by various major oil companies, the nation seems to be rebounding considerably from the COVID-19 pandemic. It now looks to maintain its reputation for oil production and establish itself as a renewable energy innovator.

Two weeks ago, Total oil company said that it would be setting up four huge energy projects in the south of Iraq in a $27million deal that is expected to start before the end of this year.

The deal features investments in enhanced crude oil recovery and a gas processing plant which will enhance the Iraqi gas market via greater production through more competitive prices, and a solar power plant project.

This funding will enable Iraq to enhance crude output in its Artawi oilfield from 85,000 bpd now to 210,000 bpd and achieve gas production levels of 300 million cubic feet of gas every day.

This is now the latest in several optimistic achievements in Iraq’s oil and gas sector in 2021, after months of developments after the global oil slump last August 2021, Iraq said that its oil exports had surged to 3.054 million bpd from 2.9 million bpd in July.

This recovery represents the increase in global demand for oil as seen all through the summer months, with Iraq’s August oil revenue reaching $6.5 billion and an average price of a barrel at $69.

The news comes after the nation finally returned to the production levels not seen since April 2021 in July. The Arabian country produced 4.18 million bpd of crude in July, which represents an increase of almost 150,000 bpd compared to June, which is more than the agreed-upon OPEC production cut-off point. In general, Iraq produces the biggest quantity of oil of all OPEC nations apart from Saudi Arabia.

That is a crucial turnaround for Iraq’s oil-dependent economy that was hit mainly hard amid the COVID-19 pandemic, as the oil demand plunged, and prices dropped sharply leaving the Iraqi economy in tatters. After many months of OPEC+ production cuts, the country can finally return to its pre-pandemic output. The recovery now supports jobs and the national economy.

BP and PetroChina also announced in August their joint venture to operate Iraq’s massive Rumaila oilfield. This oilfield will be managed and operated by state-owned Basra Energy Co. Ltd., with full access to funding from BP. While this oilfield will continue to emit greenhouse gases, BP hopes that this joint venture will offer the capital that is needed to invest more heavily in several other low-carbon projects.

British supermajor oil producer BP has worked relentlessly in recent months aiming to change public opinion of its practices, investing majorly in the development of renewable energy projects, aiming to achieve 50gigawatts of renewable energy within its portfolio by 2030, and maintaining its massive oil and gas portfolio.

Nonetheless, the company’s operations in the Rumaila oilfield have often caused the firm to come under criticism as Iraq is one of the largest methane emitters worldwide. British Petroleum has been developing the massive oil field since 2010, with the new operations under the joint venture planned to run until around 2034. Rumaila is one of the biggest oilfields globally, producing at least 1.4 million bpd.

That was positive news for Iraq, after the past withdrawal of other international oil-producing companies from the country as a result of political instability and the challenges in foreign firm terms within the nation’s oil sector.

Until recent months, BP was expected to move away from Rumaila as it looks for more carbon-friendly oil projects. Nonetheless, the government has managed to improve operating conditions for the foreign oil firms aiming to keep them operating in the market.

Changing their regulations and rules on foreign investment in the nation’s oil industry comes as a strategy of the oil ministry’s bid to raise oil production to about 8 million bpd of oil average by 2027. This improvement will nearly double the country’s current output.

Coming in line with that target, the Iraqi government has already offered several foreign oil companies with operating licenses to drill new oil wells as recovering the existing ones in the areas of Basra, Maysan, Kirkuk, Baghdad, and Nasiriyah. Eni and BP are two of the major international companies to pick up contracts.

Iraq is currently in talks with China’s CNOOC over the possible recovery of about 150 wells located in the Bazarkan field at an estimated cost of around $160 million. Many of these wells were abandoned when the pandemic struck due to a lack of oil demand. Nonetheless, most are still viable and may go a long way to support Iraq’s 2027 oil production target.

Apart from investing in the future of its oil and gas sector, Iraq is showing its openness to new renewable energy developments. Earlier this month, the country’s finance minister requested for OPEC to majorly consider the movement away from fossil fuels to more sustainable renewable energy projects.

Insisting on this message, Ali Allawi, deputy prime minister of Iraq, wrote to The Guardian urging oil producers to

“pursue an economic renewal focused on environmentally sound policies and technologies, including solar and nuclear power.”

In recent months, the nation announced several agreements with various international oil and gas operators for the development of renewable projects in the coming years. Together with Total, Iraq has also signed an agreement with PowerChina ink.

This deal was meant for the development of solar energy plants that are projected to produce up to 2 GW of power. It would enable Iraq to decrease its extensive dependence on Iranian electricity.

While the country appears far from prepared to move away from its oil and gas engagements, with significant plans to develop the industry further in the next ten years, it also wants to lead OPEC members on renewable energy production as it partners with foreign major companies on the development of solar and many other alternative energy projects.

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