18 July 2008
Iraq plans to push ahead with development of oil fields in the Nassiriyah area of southern Iraq in the next few years in order to achieve the 100,000 barrels per day of production set as the benchmark for establishing a regional oil company, Oil Minister Hussein al-Shahristani says. The company would be similar to the one recently announced for Missan, also in the south.
“We are speeding up the development of oil fields in the Nassiriyah area, which include the Nassiriyah and Gharraf fields, and we hope to achieve production of over 100,000 b/d within two years,” al-Shahristani told International Oil Daily in Baghdad this week.
“Once that is achieved the governorate will be able to establish Thi Qar Oil Co. We will soon announce the procedures to achieve that production target,” he added.
Thi Qar governorate is also home to the small Rafidain field, which holds an estimated 750 million barrels of reserves. The Nassiriyah field is estimated to have 4.4 billion bbl of reserves and Gharraf some 1.2 billion bbl. Al-Shahristani said development will have to be carried out with outside help, possibly through engineering and procurement contracts.
Thi Qar Oil Co. will be responsible for operations at all three oil fields within the governorate, which are now operated by South Oil Co. (SOC). SOC and its northern counterpart, North Oil Co., have been operating all the country’s oil and gas fields since Iraq National Oil Co. (INOC) was disbanded in the late 1980s.
Once INOC is re-established according to the draft hydrocarbon law — which has yet to be approved by the Iraqi parliament — it will become a holding company, with regional oil firms acting as its subsidiaries.
The legislation is bogged down by disputes between the central government in Baghdad and the Kurdish Regional Government in northern Iraq, which contests the powers the draft law gives to the federal authorities.
The names of the director-general and board members of Missan Oil Co., the first regional oil company to be established since 2003, will be announced within days, al-Shahristani said.
“We have three candidates for the position of director-general at the moment. We will announce the name of the new director in the coming days once the decree establishing the company is published in the official gazette,” he said.
Missan Oil will control about 10 small fields, including Buzurgan, Fauqa and Abu Ghirab — three of the fields on offer to international oil companies for development as part of Iraq’s first bid round since the 2003 US-led invasion, announced on Jun.30.
Royal Dutch Shell, with Australia’s BHP Billiton, has also been negotiating a separate short-term technical support contract for the three Missan fields.
By Ruba Husari, Baghdad
(Published in International Oil Daily July 18, 2008)