I personally had never heard of Ramco Energy or the man behind it, Steve Remp, before July 2008 when oil minister Hussein Al-Shahristani said to me in an interview in his office in Baghdad that Iraq Drilling Co (IDC) is forming a joint venture with this company that would transform the Iraqi state company into a drilling giant. A quick search and I understood why I could have never heard of either. I was never interested in pipe-coating, the main business Ramco has been involved in or Azerbaijan, where the Texan oilman apparently made his name by securing equity in a Caspian oil field after the fall of the Soviet Union. So, that’s what it takes to transform IDC into a 21st century driller!
For a 49% stake in the new joint venture, Ramco was supposed to finance about half of the $400 million deal and supply 12 of the rigs Iraq desperately needs to put an end to the sliding production capacity in its producing fields. Where was the money to come from? Ramco and the company it established, Mesopotamia Petroleum, were supposed to raise the funds on the market…amid a financial crunch! Mesopotamia has no resources of its own, and Ramco is reportedly operating with 6 staff out of a non-descript small office in Aberdeen. The company has been making losses to the point it had to sell its headquarters, it is said. In May, the Sunday Times reported it had just $2 million which was keeping it afloat. It’s no wonder it has found it impossible to raise the promised funds by the agreed date.
Finally it looks like the oil ministry has realized that Remp needs Iraq more than Iraq needs Remp. The Iraqi Oil Services Co deal was scrapped.
There go the awaited rigs and with them the “accelerated program” launched by the oil ministry for drilling and workover on hundreds of wells to put an end to the falling production capacity in the southern oilfields, and add new output by the end of 2010.
Moral of the story: a new vocabulary has to make it into the Iraqi oil industry lexicon whenever someone comes out of the blues promising wonders. It’s called due diligence. And when in doubt, play it safe. No one drills wells better than drillers.