Iraq close to signing $53bn deal with Exxon, PetroChina; denies Iran link

Prime Minister Adel Abdul-Mahdi said that he has instructed Iraq’s Oil Ministry to finalize an agreement with global energy giants ExxonMobil and PetroChina to lead a $53 billion megaproject to boost oil production. (File/AP)
Updated 07 May 2019
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Iraq close to signing $53bn deal with Exxon, PetroChina; denies Iran link

  • Iraq will partner with the companies to pump desalinated seawater into subterranean oil formations to raise well pressures and boost production
  • Iraq is producing oil at record levels, but officials are targeting higher output to meet federal budget projections and finance the country’s reconstruction

BAGHDAD: Iraq is close to signing a $53 billion, 30-year energy agreement with Exxon Mobil and PetroChina, Prime Minister Adel Abdul Mahdi said on Tuesday, denying any link between the mega-project and US permission for Iraq to do business with Iran.
Iraq expects to make $400 billion over the 30 years the deal will be in effect, the prime minister said.
The southern mega-project involves the development of the Nahr Bin Umar and Artawi oilfields and raising production from the two fields to 500,000 barrels per day (bpd) from around 125,000 bpd now, Abdul Mahdi said.
The project is crucial to supplying water to oilfields in the south in order to boost pressure and keep production steady.
Media reports had quoted Iran’s ambassador in London on Monday saying the United States would grant waivers to Iraq allowing it to deal with Iran economically, in exchange for Baghdad signing an oil deal with Washington.
“Talks now between the oil ministry and Exxon Mobil and PetroChina are focused on how to split profits if oil prices rise or decline,” Abdul Mahdi said in response to a Reuters question on the obstacles holding up a final agreement.
“The deal lasts for 30 years and such financial details are sensitive and should be given more discussions,” he added.
Iraq is the second largest oil exporter in OPEC and has long-term aims to boost output curtailed by decades of war and sanctions. Such projects are among the most valuable prizes in the world for international oil companies. An initial agreement would be a big boost for Exxon Mobil’s plans to expand in Iraq.
It is also one of the only countries in the world to have friendly relations with both the United States and Iran. Tehran and Washington, arch enemies elsewhere, are Baghdad’s main allies and vye for influence there.
Exxon Mobil and PetroChina will build a water injection project to feed oil wells in the south, as well as rehabilitate and build new export pipelines, Abdul Mahdi said.
The project also aims to process 100 million standard cubic feet of natural gas per day from the Artawi and Nahr Bin Umar fields.
US President Donald Trump pulled out last year from a 2015 nuclear deal between Iran and world powers, and reinstated sanctions against Tehran. Washington has told buyers of Iranian oil to stop purchases by May 1 or face sanctions.
Iraq does not import oil and has a waiver from the United States allowing it to import Iranian natural gas.
“The US sanctions are against countries that buy Iranian oil only, and Iraq doesn’t buy any Iranian crude. For gas, as far as I know (waivers ending) won’t affect (gas imports) right now. The waiver for gas still stands,” an Iraqi oil official told Reuters on Monday.


China’s crude oil imports from Saudi Arabia up 43%

Updated 25 May 2019
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China’s crude oil imports from Saudi Arabia up 43%

  • Imports grew to 1.53 million barrels per day compared with 1.07 million a year ago
  • Sinopec Group and China National Petroleum Corp., the country’s top state-owned refiners, are halting Iranian oil purchases for loading in May, three people with knowledge of the matter said

BEIJING: China’s crude oil imports from Saudi Arabia rose 43 percent in April, making the Middle Eastern OPEC kingpin once again the top supplier to the world’s second-biggest economy, boosted by demand from new private refiners.
Saudi imports grew to 6.30 million tons, or 1.53 million barrels per day (bpd) on a daily basis, compared with 1.07 million bpd in the year ago period, according to data from the General Administration of Customs released on Saturday.
Saudi shipments were supported by higher refinery run rates at Hengli Petrochemical Co. Ltd, with production at the 400,000 bpd-capacity refinery in northeast China expected to reach optimal levels in late June. About 70 percent of the feedstock for Hengli came from Saudi Arabia.
Meanwhile Russian supplies were 6.12 million tons, or 1.49 million bpd, up from 1.35 million bpd in April last year.
China in April imported 3.24 million tons of crude oil from Iran, or 789,137 bpd, up from March’s 541,100 bpd, as companies ramped up buying before the scrapping of sanctions waivers the US had granted to big buyers of Iranian oil.
China Petrochemical Corp. (Sinopec Group) and China National Petroleum Corp. (CNPC), the country’s top state-owned refiners, are halting Iranian oil purchases for loading in May, three people with knowledge of the matter said.
Venezuela shipments stood at 1.9 million tons, or 462,813 bpd in April, up 85 percent versus 249,700 bpd in March, while crude imports from Iraq were 3.31 million tons, or 806,372 bpd, down from 904,500 bpd the previous month.