Iraqi oil and gas…and geopolitical challenges

Between the visit to Washington on April 15 and the visit to Riyadh three days later, Iraqi Prime Minister Muhammad Shia al-Sudani decided to postpone the date for opening competitive offers for international oil companies on contracts for exploratory blocks and oil and gas fields for the fifth (supplementary) and sixth licensing rounds, which was set for the twenty-seventh of April. The same month (i.e. April), for a period of 15 days, with the aim of paving the way for the participation of the largest number of companies wishing to develop the fields and plots on offer, which contributes to enhancing competition for 30 energy projects.

In Washington, Iraqi and American companies signed a series of agreements in the presence of the Sudanese Prime Minister and American officials, to exploit natural gas in electricity production, and to treat 300 million cubic feet per day in the Bin Omar oil field. Among the American companies that signed memorandums of understanding with the Iraqi side: KBR, Baker Hughes, and General Electric. The agreements include laying 400 km of pipelines to transport gas, an offshore export facility, and a gas processing plant. Other companies expressed their willingness to submit offers to participate in investing in the fields offered in the fifth and sixth licensing rounds.

As for Riyadh, Al-Sudani participated at the head of a high-ranking Iraqi delegation in the activities of the World Economic Forum (Davos), held under the slogan “International Cooperation, Growth, and Energy for Development,” and held a series of meetings with a number of state leaders, presidents, and representatives of major international companies specialized in the field of energy. and digital technology. He focused on a package of projects ready for implementation in the field of oil and gas, stressing his government’s policy of seeking to attract capital and major companies, within the framework of “Iraq’s vision of the necessity of cooperation and creating economic partnerships between the countries of the region.” He described the “Development Road” project, which his government adopted, as “a road map for cooperation between East and West, a major qualitative development leap for the region, and the best ways to transfer energy in the future.”

Iraq has previously completed the first phase of the fifth licensing round, with the victory of the Emirati company Al Hilal and the Chinese Geojiad company. The “supplementary” phase of this round includes 16 fields and exploration plots, and they are presented in the sixth round, which includes 14 plots. According to confirmations from the Iraqi Ministry of Oil, the goal of these tours is to maximize the country’s oil and gas reserves, support the energy sector and related industries, and advance the economic, social, and environmental reality, by investing resources in cooperation with international companies.

If the previous four licensing rounds, which began implementation on June 30, 2008, added more than two million barrels per day to its oil production, which currently stands at about 4 million barrels, then the implementation of the projects for the fifth and sixth licensing rounds is expected to increase production to about 6 million barrels per day, and it will be available. The need for local consumption of gas and electricity generation, and Iraq may become one of the countries exporting the surplus of its gas reserves. Although the balance between oil exports and sustainable development in Iraq cannot be achieved except after investing the benefits of oil revenues in non-oil production projects, the great fear and anxiety of facing “geopolitical” risks and a state of security and political instability must be taken into account. In the region, especially since the fifth round projects focus on the border fields with Iran and Kuwait, and the sixth round fields are located in Wadi Hauran, and along the areas near the borders with Syria and Jordan.

*A Lebanese writer specializing in economic issues