popular articles

Kurdish production complicates Baghdad’s gas ambitions

Iraqi Kurdistan continues to increase its oil production despite restrictions from Baghdad, which is trying to comply with OPEC+ quotas and attract US gas investment to diversify its energy sources.

Please share:

Oil production in Iraq’s Kurdistan region is increasing, despite efforts by the central government in Baghdad to limit it and meet OPEC+ quotas.
The latest data from SOMO (State Oil Marketing Organization) show Iraq producing 4.33 million barrels per day (b/d) in July 2024, exceeding the imposed quota of 3.93 million b/d by 400,000 b/d.
This situation is creating growing tensions between the federal government and the Kurdistan Regional Government (KRG), with threats of cuts to the federal budget allocated to the Kurdish region if production levels are not adjusted.

Baghdad seeks to attract US investment in the gas sector

To offset these tensions and improve its economic position, Iraq is banking on the development of its gas sector.
Oil Minister Hayan Abdel-Ghani has announced that he will present ten gas exploration blocks to American companies during a forthcoming visit to the United States.
This initiative comes after several licensing rounds in which the majority of available fields were awarded to Chinese companies, leaving blocks untapped.
The project aims to diversify Iraq’s energy partnerships and reduce dependence on gas imports, particularly from Iran, essential for supplying energy to power plants.
In addition, Iraq plans to launch a new gas project by the end of the year on the Al-Faihaa oil field in the south of the country, with an estimated production capacity of 125 million standard cubic feet (mscf).
This project is part of a wider strategy that also includes recent agreements to develop 13 oil and gas blocks, strengthening the local energy infrastructure.

Oil companies expand in Kurdistan despite restrictions

Meanwhile, oil companies operating in Kurdistan continue to expand their activities.
DNO, a Norwegian company, is mobilizing a new drilling rig at the Tawke site, increasing production to 79,800 b/d in the second quarter of 2024.
This expansion marks a significant recovery from previous slowdowns, although export constraints persist due to the closure of the pipeline to Turkey.
Other players such as Shamaran Petroleum and Gulf Keystone are adopting similar strategies, stepping up their trucking operations to move crude to the local market, compensating for the absence of regular exports.
Gulf Keystone reports an improvement in its financial situation and a return to positive cash flow for the first half of 2024, while adjusting its operations to market realities.

Implications for Iraq’s compliance with OPEC+ quotas

The surge in Kurdish oil production poses a direct challenge to Iraq’s efforts to meet its OPEC+ commitments.
SOMO disputes the production figures published by international companies in the Kurdistan region, believing them to be lower than announced.
This uncertainty makes it difficult to monitor total production and compliance with quotas, exacerbating tensions between Erbil and Baghdad.
In response to these difficulties, Baghdad stepped up the pressure on the KRG by reaffirming that any additional production above 46,000 b/d would have to be accompanied by payments to the federal government.
This measure is intended to deter any attempt by the KRG to increase production autonomously without coordination with the central government.

Domestic market and logistics challenges

Faced with the continuing closure of the pipeline to Ceyhan in Turkey, Kurdish producers are looking for alternatives on the domestic market.
Crude is sold locally at prices ranging from $28 to $40 a barrel, well below international tariffs.
Local refineries process crude oil into products such as diesel and gasoil, while some volumes are smuggled across the border into Iran and Syria.
Local authorities, meanwhile, are closing down illegal refining facilities and imposing environmental protection requirements on unlicensed refineries.
These actions demonstrate an attempt to regulate a local market that is increasingly diversified, but also difficult to control in a context of political and economic uncertainty.

Future strategies and geopolitical issues

The continued closure of the Kurdistan-Turkey pipeline and the uncertainties surrounding its reopening add to the complexity of Iraq’s energy situation.
A resumption of exports via this route could further complicate Iraq’s OPEC+ compliance efforts, creating a dilemma for Baghdad.
In this context, the approach of energy diversification and reducing import dependency by attracting US investment appears to be a pragmatic strategy for securing the country’s energy future.
Iraq’s energy challenges continue to evolve in an environment marked by internal rivalries and complex international dynamics.
Efforts to balance oil production, meet international commitments and attract new economic partners will define the country’s future trajectory on the global energy scene.

Register free of charge for uninterrupted access.

Publicite

Recently published in

Ithaca Energy has acquired the majority of Eni's British oil and gas assets, thereby consolidating its position in a region undergoing significant changes.
The escalation of tensions between Israel and Iran threatens the stability of the global oil market. OPEC+ must assess its capacities in the face of a possible supply shock.
The escalation of tensions between Israel and Iran threatens the stability of the global oil market. OPEC+ must assess its capacities in the face of a possible supply shock.
Oil prices significantly increase after a statement by U.S. President Joe Biden mentioning potential strikes against Iranian oil infrastructures, raising concerns about global supply.
Oil prices significantly increase after a statement by U.S. President Joe Biden mentioning potential strikes against Iranian oil infrastructures, raising concerns about global supply.
Libyan authorities in the East have declared the resumption of oil production at the oil fields and the reopening of exports, which were halted due to a major political crisis opposing the rival government in Tripoli, recognized by the UN. This decision follows intense negotiations aimed at stabilizing the country’s oil sector.
Libyan authorities in the East have declared the resumption of oil production at the oil fields and the reopening of exports, which were halted due to a major political crisis opposing the rival government in Tripoli, recognized by the UN. This decision follows intense negotiations aimed at stabilizing the country’s oil sector.
TotalEnergies announces an increase in its oil and gas production until 2030, despite pressures to reduce fossil fuels. CEO Patrick Pouyanné defends this strategy amid climate challenges.
Enbridge Inc. partners with bp to develop major oil and gas infrastructures in the Gulf of Mexico, thereby strengthening their presence and capabilities in the region.
Enbridge Inc. partners with bp to develop major oil and gas infrastructures in the Gulf of Mexico, thereby strengthening their presence and capabilities in the region.
Shell Pipeline Company LP announces the Rome Pipeline project, increasing oil transport capacity and consolidating its strategic position in the Gulf of Mexico.
Shell Pipeline Company LP announces the Rome Pipeline project, increasing oil transport capacity and consolidating its strategic position in the Gulf of Mexico.
US crude oil reserves increased unexpectedly due to a significant slowdown in refinery activity, according to the US Energy Information Administration (EIA).
US crude oil reserves increased unexpectedly due to a significant slowdown in refinery activity, according to the US Energy Information Administration (EIA).
Despite tensions in the Middle East, oil prices remain stable due to abundant supply and the interests of Tehran and Washington to avoid escalation.
Asian refiners remain optimistic amid rising tensions between Iran and Israel, anticipating that Persian Gulf crude flows to Asia will stay stable despite the ongoing conflict.
Asian refiners remain optimistic amid rising tensions between Iran and Israel, anticipating that Persian Gulf crude flows to Asia will stay stable despite the ongoing conflict.
Adnoc, the national oil company of the United Arab Emirates, announces the acquisition of Covestro, a German chemical giant, for 12 billion euros. This acquisition is part of its strategy to diversify its activities and strengthen its presence in Europe.
Adnoc, the national oil company of the United Arab Emirates, announces the acquisition of Covestro, a German chemical giant, for 12 billion euros. This acquisition is part of its strategy to diversify its activities and strengthen its presence in Europe.
The latest auction of oil blocks in India has sparked significant interest among local private players, but the persistent absence of international companies highlights ongoing doubts about the real opportunities in exploration.
The latest auction of oil blocks in India has sparked significant interest among local private players, but the persistent absence of international companies highlights ongoing doubts about the real opportunities in exploration.
A report reveals that CO2 emissions linked to gas flaring by oil companies are underestimated. Groups such as Sonatrach, BP, and TotalEnergies face accusations of opaque practices regarding these polluting releases.
ConocoPhillips secured the right to seize payments from PDVSA related to the Dragon gas project between Trinidad and Venezuela. This decision is part of ongoing efforts to recover a $1.33 billion debt linked to the nationalization of its assets.
ConocoPhillips secured the right to seize payments from PDVSA related to the Dragon gas project between Trinidad and Venezuela. This decision is part of ongoing efforts to recover a $1.33 billion debt linked to the nationalization of its assets.
Pemex’s new Olmeca refinery has exported its first 112,000 barrels of petroleum coke to India. This shipment marks a step forward for the project despite doubled costs and commissioning delays.
Pemex’s new Olmeca refinery has exported its first 112,000 barrels of petroleum coke to India. This shipment marks a step forward for the project despite doubled costs and commissioning delays.
Kazakhstan, a major oil player in Central Asia, is facing production challenges due to delays in its key projects, limiting its ability to meet objectives and comply with OPEC+ quotas.
Kazakhstan, a major oil player in Central Asia, is facing production challenges due to delays in its key projects, limiting its ability to meet objectives and comply with OPEC+ quotas.
Gregory Goff, member of the board of directors at Exxon Mobil, is now at the head of Amber Energy, an entity affiliated with Elliott Investment Management, in the context of the acquisition of Citgo, a Venezuelan-owned oil refiner, for an estimated amount of USD 7.28 billion.
High-sulfur petcoke prices are plummeting due to China's withdrawal from this segment, pushing producers to seek new markets in India and Turkey.
High-sulfur petcoke prices are plummeting due to China's withdrawal from this segment, pushing producers to seek new markets in India and Turkey.
Saudi Aramco has raised $3 billion via a sukuk issue, despite a drop in oil production. The funds raised are intended to support the company's dividend commitments and capital expenditure projects.
Saudi Aramco has raised $3 billion via a sukuk issue, despite a drop in oil production. The funds raised are intended to support the company's dividend commitments and capital expenditure projects.
Saudi Arabia is changing its oil strategy, abandoning its target of $100 a barrel in order to increase production and regain market share, despite a likely drop in prices.
Saudi Arabia is changing its oil strategy, abandoning its target of $100 a barrel in order to increase production and regain market share, despite a likely drop in prices.
Vladimir Putin has announced the strengthening of energy alliances between Russia, the BRICS and OPEC+, with the aim of stabilizing the global energy market, despite the sanctions imposed by the West in response to the conflict in Ukraine.
Oil prices fall by 3% as OPEC+ forecasts a production increase as early as December. Saudi Arabia abandons its target of $100 per barrel, putting pressure on the markets.
Oil prices fall by 3% as OPEC+ forecasts a production increase as early as December. Saudi Arabia abandons its target of $100 per barrel, putting pressure on the markets.
ExxonMobil injects $10 billion into the development of the Owo project in Nigeria. This initiative aims to increase oil production and consolidate the group's offshore operations in the country.
ExxonMobil injects $10 billion into the development of the Owo project in Nigeria. This initiative aims to increase oil production and consolidate the group's offshore operations in the country.
The Federal Trade Commission imposes restrictions on Chevron as part of its acquisition of Hess Corporation, preventing John Hess from sitting on the board of directors to limit the risk of collusion and preserve competition in the sector.
The Federal Trade Commission imposes restrictions on Chevron as part of its acquisition of Hess Corporation, preventing John Hess from sitting on the board of directors to limit the risk of collusion and preserve competition in the sector.

Advertising