Iraqi Oil Ministry inks agreements to boost output, gas supply
Date
8/15/2024 8:49:48 AM
(MENAFN) On Wednesday, the Iraqi Ministry of Oil announced the preliminary signing of contracts for the development of 13 exploration blocks and oil and gas fields. These agreements are expected to significantly increase the country's production, adding an estimated 750,000 barrels of crude oil and 850 million standard cubic feet of gas. This initiative aims to enhance Iraq's Natural gas output, which is crucial for powering electricity plants that currently rely on gas imports from Iran.
Oil Minister Hayan Abdul Ghani emphasized the importance of increasing domestic gas production to offer more flexibility in supplying power plants. The contracts, finalized in a bidding round held in May, were primarily awarded to Chinese companies, reflecting their strong presence in the energy sector. The contracts will follow a profit-sharing model rather than traditional service contracts, which is anticipated to be more attractive to investors by allowing them to share in the revenues after deducting royalty fees and cost recovery expenses.
This new round of licensing, Iraq’s sixth, is particularly focused on gas production to reduce dependency on imported energy and boost overall energy security. The decision to adopt profit-sharing contracts over fixed-fee service contracts aims to encourage further investment in Iraq's energy sector. Out of 29 projects offered in the bidding round, Chinese firms successfully secured ten, underlining their significant role in Iraq’s oil and gas industry.
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