Iraq cancels Mansuriya gas field deal

16 December 2018
Contract was awarded by Iraq in 2011 to a consortium of Turkish Petroleum, Kuwait Energy and South Korea’s Kogas

Iraq’s new oil minister, Thamir Ghadhban, is reported to have cancelled a major contract with a Turkey-led consortium for the development of the Mansuriya gas field, according to Iraq Oil Report.

Iraq has signed more than a dozen oil and gas field development contracts with international oil companies since opening up the sector in 2010. Awarded in 2011 to a consortium of Turkish Petroleum (TPAO), Kuwait Energy and South Korea’s Kogas, this is the first contract to be cancelled after years of delays.

The 20-year technical service contract was awarded in Iraq’s third licensing round in 2011, with the consortium due to increase gas production to 32 million cubic feet a day (cf/d). However, even after eight years, the consortium failed to produce any gas from the field.

Operated by Turkish Petroleum, which had a 37.5 per cent stake in the contract, the gas development was put on hold in 2014 due to the security situation, with Islamic State militants taking over swathes of territory across the north and west of Iraq.

Privately owned Kuwait Energy has a 22.5 per cent stake, while Kogas has 15 per cent and state-owned Midland Oil Company has 25 per cent.

Tackling shortages

The 4.5 trillion cubic feet gas field lies in the eastern Diyala province near Iraq’s border with Iran. It was originally intended to help alleviate Iraq’s chronic power shortages by providing feedstock for a new power station in the area. However, the Mansuriya power plant has been operating on imported gas from Iran since 2017.

Iraq began producing gas from the Siba gas field in southern Basra province, reaching 25 million cf/d in April this year, and targeting a plateau rate of 100 million cf/d. The Siba field is expected to hold 1.5 trillion cubic feet of gas reserves. It is operated by  Kuwait Energy, TPAO and the Egyptian General Petroleum Corporation.

Akkas, in the western Al-Anbar province, was the third field awarded in Iraq’s gas field licensing round in 2011. The field was operated by Kogas, but was captured by Islamic State militants in May 2014.

It was recaptured in late 2017, and Iraq’s previous oil minister, Jabbar al-Luaibi, met with Kogas officials earlier this year to discuss restarting operations.

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