Iraq, US Orion to Ink Field Agreement

Iraq and US energy company Orion have agreed to redevelop an oilfield with enormous associated gas reserves, the oil ministry announced January 8. The Nahr Bin Umar field, in the south, was discovered in mid-20th century and semi-developed in late 1990s. It is estimated to contain 6bn barrels of oil and 340bn m³ associated gas.

The field is producing 40,000 b/d of oil and 25mn m³/d gas, but only a small amount of the gas is collected and sent to Basra refinery. The field can produce 10 times more oil, Wood Mackenzie estimates.

Iraq’s flaring surged to 17.7bn m³ last year, from 16.2bn m³ in 2015. It also re-injects gas into oil fields to maintain oil output but it only produced 1.1bn m³ sale gas last year, according to BP statistics. However, recently Gazprom Neft inaugurated a gas plant in Iraq to collect and process further 1.6bn m³/yr gas.

The oil minister Jabbar al-Luaibi said that a memorandum of understanding would be signed in the coming days between Basra Oil Company and Orion in coming days.

The Basra region needs a lot more gas, especially for newly inaugurated power plants. National Iranian Oil Company announced January 8 that it will start gas deliveries to this region in a few months. Iran and Iraq have two gas purchase agreements, each 25mn m³d, one for Baghdad and one for Basra. Iran started deliveries to Baghdad in June at 7mn m³/d but that has now doubled.