Top Energy Stories

Iraq is ramping up production from three oil fields in Dhi Qar province, taking advantage of high global oil prices and its increasing OPEC-plus quota. Output from the Gharraf oil field has jumped by 20,000 barrels per day (bpd) in the past month, and the state-run Dhi Qar Oil Company (DQOC) is bringing the Subba field back after more than two years offline. A new drilling program has also started at the Nassiriya field. Dhi Qar is not the only province to benefit from Iraq's drive to increase production. Output has increased from Basra fields by more than 250,000 bpd compared to 2021 averages, and two state-operated fields in Missan province with a combined 30,000 bpd of production are back online for the first time since March 2020. But the renewed activity in Dhi Qar is a signal that the Oil Ministry is now reaching deep into its portfolio of assets to bring spare capacity online. Gharraf was the first Iraqi field to be shut in as a result of the coronavirus pandemic, and Subba has been shuttered since October 2019 because of technical problems stemming from bureaucratic dysfunction. For more details on the new production coming online, read the full story on Iraq Oil Report.

Western sanctions are creating new challenges for Russia in Iraq, according to several industry officials, who said Russian companies have had trouble making and receiving payments and faced hesitancy from commercial partners. Despite the new difficulties, however, Russia's invasion of Ukraine has not yet caused major disruptions to Iraq's oil industry. Iraqi leaders have shied away from criticizing Russian President Vladimir Putin's decision to go to war, and neither the federal government nor the semi-autonomous Kurdistan region are expected to take any action against Russian companies, which operate a handful of key oil and gas projects throughout the country. One area of acute concern for international oil companies is Rosneft's controlling stake in Kurdistan's export pipeline, which they rely on to monetize their production — and indirectly pay fees to Rosneft in order to use. Read the full story on Iraq Oil Report.

Iraq's federal government and Kurdistan region posted a modest month-on-month increase in oil output, producing a combined 4.591 million barrels per day (bpd) in March. According to field-by-field data compiled by Iraq Oil Report, production from fields under Baghdad’s control averaged 4.139 million bpd in March, compared with 4.073 million bpd in February when two southern fields were temporarily shut down. Output from fields controlled by the Kurdistan Regional Government (KRG) edged up slightly to 453,000 bpd from 448,000 bpd the previous month. Read the full story on Iraq Oil Report.

How To Navigate Iraq's Business Environment

A message from Iraq Britain Business Council (IBBC):

International and regional companies operating in Iraq need good advocacy, insights, and support to navigate Iraq’s business environment. IBBC has many years of successful operations on behalf of our members, with strong Governmental and supply chain contacts to enable and promote your business. Why not apply for membership and attend our international London and Dubai conferences open to non-members?

Register for our upcoming IBBC Spring Conference at the Mansion House, London on May 24 via our website here.

IBBC also runs trade missions to Iraq, at least three events a month in the UK, Iraq and MENA region, special member away weekends, dinners, and meetings with Iraqi officials in UK and Iraq, and regular advisory papers on economics and political economy of Iraq. We are Iraq’s International business network with a strong anchor in the UK, and we welcome reputable businesses from all sectors, including especially Education, Training and Heritage, Professional Services, Energy, Tech, General Trading, Construction and Finance.

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Interview Spotlight

As the director general of the State Oil Marketing Organization (SOMO), Alaa al-Yassiri is responsible for overseeing the sale of Iraqi crude to the international market, and the recent rise in global oil prices has brought in record revenues, which in March exceeded $11 billion. Iraq is in a position to supply more oil to the market in the event of disruption from Russia, Yassiri told Iraq Oil Report, but it will take time to bring on new production and any such decision would be made by OPEC-plus. In addition to speaking about Iraq's export potential, Yassiri discussed in-kind crude payments to Russian oil companies, diversifying Iraq's export routes, and a strategic pipeline to link southern oil production with northern exports via Turkey. Read the full interview on Iraq Oil Report.

Abdulbaqi K. Ali is the Oil Ministry's consultant for Energy Affairs, tapped by Oil Minister Ihsan Ismaael to start Iraq on a path toward an energy transition and to meet targets for reducing carbon emissions under the Paris Agreement, which Iraq joined in December 2021. As a country that suffers from both chronic electricity shortages and the effects of climate change, Iraq has overwhelming incentives to invest in renewable energy. Ali spoke with Iraq Oil Report about plans to install 12 GW of renewable power generation, including several solar plants, as well as projects to capture and process the associated gas that is produced along with crude oil, half of which is currently burned off as waste in an economically and environmentally ruinous practice known as flaring. Read the full interview on Iraq Oil Report.

Iraq Oil Report spoke with Ibrahim Abdul-Zahra, the deputy director of the state-run South Refineries Company (SRC), to ask about southern Iraq's domestic supply capacity. Some refining units are operating below their nameplate capacity, he said, partly because of the high salt, water and mud content of the crude feedstock. For now, the country needs to import gasoline to mix with local production and blend with condensate in order to meet demand. The gap between supply and demand should close a bit in September, when a fourth unit of Basra's Shuaiba refinery is scheduled to come online, adding about 70,000 bpd of new crude processing capacity. In the meantime, Zahra said, the SRC cannot be blamed for current fuel shortages since it is up to the state-run Oil Products Distribution Company (OPDC) to coordinate with the State Oil Marketing Organization (SOMO) on the amount of imports needed. Read a full transcript of the interview on Iraq Oil Report.

Capt. Haidar Faher Nasser is the director of Khor al-Zubair, which was built in the 1970s as an industrial and commercial port, and has been repurposed to handle the import and export of oil products to meet Iraq’s growing need for refined products, mainly gasoline and diesel. Iraq’s refineries cannot produce enough light ends to meet domestic demand for transport fuel and the country relies on imports of 300,000 tons of gasoline and diesel per month through Khor al-Zubair, though imports have declined significantly since 2019 as new refining capacity has come online. The port is operating 24 hours a day with 10 of its 13 berths operating at full capacity, handling not only fuel imports but also exports of roughly 580,000 tons a month. Three new berths were recently added and work on another state-of-the-art berth funded by a Japanese loan is due to be completed by the end of the year with new storage tanks, Nasser said. Read a full transcript of the interview on Iraq Oil Report.

More National News

Ayser Jabbar for Al-Monitor: Iraq grapples with rising food costs as a result of Ukraine war

The global economic crisis due to the Russian-Ukrainian war has led to price hikes in Iraq. This has prompted the Iraqi government to amend several decisions related to the import of goods, especially foodstuffs, instructing the internal security forces to monitor markets and prices.

The prices of some foodstuffs, especially wheat-derived goods, such as pastries, in addition to cooking oil, has increased by 20%.

Consequently, the Iraqi government is now paying 30% more to Iraqi farmers for their wheat. This aims to support local farmers and ensure that they sell all their products for domestic use. The government is also offering loans to farmers through the Agricultural Bank and other Iraqi banks.

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