Iraq lifts production at Exxon’s West Qurna 1 oilfield to 465,000 bpd: officials

West Qurna 1 oilfield, above, developed by Exxon, was previously producing about 440,000 barrels per day. (Reuters)
Updated 17 June 2019

Iraq lifts production at Exxon’s West Qurna 1 oilfield to 465,000 bpd: officials

  • West Qurna 1 oilfield, developed by Exxon, was previously producing about 440,000 barrels per day
  • Iraq is producing slightly more than 4.5 million bpd, below its full capacity of nearly 5 million bpd

WEST QURNA 1 OILFIELD, Iraq: Production at Iraq’s giant West Qurna 1 oilfield in the south has reached 465,000 barrels per day (bpd) after the completion of new crude processing facilities and oil storage tanks, Iraqi oil officials said on Monday.
West Qurna 1 oilfield, developed by Exxon, was previously producing about 440,000 bpd, officials working at the field told Reuters on the sideline of a ceremony to launch the new installations.
Exxon’s foreign staff were present, having returned to the oilfield on June 2, two weeks after Exxon pulled about 60 people from the oilfield and flew them to Dubai.
The evacuation came days after the United States withdrew non-essential staff from its embassy in Baghdad, citing a threat from neighboring Iran.
Iraqi oilfield officials said Exxon’s foreign staff, including senior management and engineers, returned to the oilfield only after the Iraqi government agreed to provide extra security measures at the field, including the deployment of additional police and armed forces.
The officials and Exxon managers accompanied reporters on a tour inside West Qurna 1 on Monday where armored vehicles and soldiers from the Iraqi army were seen stationed at the gates of the oil production facilities.
Two new crude processing facilities with a joint capacity to process 150,000 bpd of oil, a unit to separate water and oil and five oil storage tanks started testing operations on Monday. The new projects would help to boost production at the field to progressively reach 490,000 bpd, said a senior oilfield manager.
Iraq is producing slightly more than 4.5 million bpd, below its full capacity of nearly 5 million bpd in line with an agreement between OPEC and other producers such as Russia to curtail global supply in order to support prices.


Saudi central bank ready for any Aramco-related liquidity squeeze

Updated 10 December 2019

Saudi central bank ready for any Aramco-related liquidity squeeze

  • Aramco’s long-awaited listing on the Saudi Arabian stock exchange is due on Wednesday
  • The central bank has set up a team to closely monitor all indicators in the banking system during the IPO

RIYADH: Saudi Arabia’s central bank is ready for any liquidity squeeze from Saudi Aramco’s initial public offering (IPO) and is closely monitoring local banks, its governor said, after heavy demand for loans to buy the stock.
Aramco’s long-awaited listing on the Saudi Arabian stock exchange is due on Wednesday, completing the largest IPO on record and raising $25.6 billion from retail and institutional buyers who took on debt to back their orders.
“We don’t rule out that there might be squeeze of liquidity later on, that’s why I am ready and stand ready to intervene,” Ahmed Al-Kholifey told Reuters.
Saudis had clamoured to own part of the “crown jewel” of the world’s top oil exporter in the lead up to its IPO, with Aramco’s institutional tranche 6.2 times oversubscribed, while more than 5 million individuals subscribed to a retail tranche.
The Aramco IPO is the centerpiece of the Saudi crown prince’s plans to diversify the economy away from a reliance on oil, as the money will be reinvested by the Saudi Public Investment Fund (PIF) to promote growth in other sectors.
During the IPO process, the loan-to-deposit ratio (LDR) at some banks had exceeded a 90% “soft guideline” set by the regulator, but the ratio improved after the allocation process ended, Kholifey said in an interview.
“So far no bank has come to ask for liquidity from the central bank. We are ready to intervene in case there is a squeeze of liquidity but most of the indicators right now are not worrying,” Kholifey added.
MONITORING TEAM
The central bank has set up a team specifically to closely monitor all indicators in the banking system during the IPO process, and it held meetings on a daily basis.
“I don’t think in the near future they will settle, we have to keep monitoring the situation until we see things are normal, especially the LDR,” he said.
Saudi corporates snapped up the biggest percentage of allocations to the Aramco IPO at 37.5% and Saudi government institutions were allocated 13.2% of the institutional tranche, the latest figures issued by the deal’s lead bank showed.
Kholifey said that less than 2% of retail subscriptions were leveraged, and most of the bank financing went to high-net-worth individuals and institutional buyers.
He expects most of the IPO proceeds to be invested locally by the PIF, given that most of subscription were internal.
Riyadh scaled back its original IPO plans, scrapping an international roadshow to focus on marketing Aramco to Saudi investors and Gulf Arab allies. It has remained silent on when or where it might list Aramco stock abroad.