Iraq Strategic Booklet
Iraq Strategic Booklet
Iraq Strategic Booklet
Iraq
Oil and Gas Industry
Strategic Report
By
Introduction, Field Assessment Samples,
Contents, List of Figures and Index Only
Ninth Edition
August 2015
Our Product Clients
Our Iraq Oil and Gas Industry Strategic Report, Eighth Edition strategic report provides a
comprehensive analysis of the entirety of Iraq’s Oil and Gas Industry - its upstream, midstream,
downstream and infrastructure elements.
The primary focus of the report is Iraq’s upstream sector. This sector is analysed on a basin by
basin basis, providing basin and overall resource inventories, data sets for oil and gas fields (both
developed and undeveloped) and an assessment of exploration potential.
Iraq is regarded as the most prospective oil and gas acreage available in the world today, with the
status of its Oil and Gas licensing continually evolving and developing through more bidding
rounds.
The Ninth edition of the report contains a comprehensive update of all existing content,
particularly in the Upstream, Downstream and Infrastructure sections.
In addition to revising and updating all existing content, an additional 9 new discoveries have
been documented in the Northern Folded Zone. These are as follows:
Atrush
Barda Rash
Benenan
Bijeel
Kurdamir
Sarqala
Simrit
Shakal
Swara Tika
All of the new Fields we have documented are part of Iraq’s Kurdistan region, an area which has
seen much exploration and development in recent times. For each of the fields we have given a
detailed analysis of all reported developments, such as the companies involved in the field’s
development, as well as available reserves figures.
The section on Iraq’s Petroleum Geology has been extensively revised to provide a
comprehensive treatment of the subject.
In addition to this major update, the costs for all fields within the report have been reassessed and
updated to reflect price changes within the Iraq Oil and Gas Industry. The economic
consequences of these changes are further analysed in our Iraq Fields Financial Report.
Report Structure.
Our report and map products offer our clients an accessible way to track these developments and
provide comprehensive information on Iraq’s licensing and Oil and Gas infrastructure.
The Ninth Edition of Bayphase's Iraq Oil and Gas Industry Strategic Report provides a
comprehensive review of Iraq’s Oil and Gas Industry, which encompasses the following
elements:
- Upstream: Oil and Non-associated Gas Fields and Production Facilities
- Midstream: Pipelines, Terminals
- Downstream: Refineries, Petrochemical Plants, Gas Processing Plants
- Infrastructure: Power Generation, Transportation
Our Iraq Strategic Report takes a basinal view of Iraq, and categorises the report into the
following three main sedimentary basins:
Overall the report presents an industry wide assessment of oil and gas reserves within Iraq, with
its main focus on Iraq's upstream oil and non-associated gas fields and their production facilities.
Analysis and detailed data sets for a total of 105 oil and non-associated gas fields is provided,
including those fields which are currently in production and others which are undeveloped and
awaiting investment.
Report History
- Paper Version of our current Iraq Oil and Gas Industry Strategic Report
- Free Searchable CD-ROM of our current Iraq Oil and Gas Industry Strategic
Report
- Two Map Set including: Paper Versions (Folded) of our current Iraq Exploration
and Production maps
- Paper Version of our current Iraq Fields Database
- Excel Data Base of our current Iraq Fields Database
Our report is supplied in both electronic and paper formats. The electronic version is provided as
a PDF document on a CD-ROM, and the paper copy is supplied as a sure-bound document. Both
copies of the report will be dispatched by FEDEX delivery.
The analysis carried on the 105 fields is indicated by the field sample Tawke provided on the next
pages:
1.1.1.1.1.1. Tawke
The Tawke oilfield is located in the Kurdistan region of Northern Iraq. It covers an area of
approximately 25 kilometres by 3 kilometres as defined by 3D seismic and the 25 wells drilled to
date. The field is currently operated by DNO, producing about 120,021 barrels of oil per day.
This production is split between local sales (60%) and export via the main Kirkuk-Ceyhan
pipeline (40%).
In October 2013 DNO announced that it had initiated sales from it’s second horizontal well in the
Tawke field, following testing at a record rate of 32,500 barrels of oil per day (bopd). There are
currently four horizontal wells on production, with two drilling and at least three more planned
for spudding during the second half of 2014, bringing the total number of horizontal wells to nine
by 2015.
In May 2014 DNO announced that production from the Tawke field had reached 120,021 bopd,
the first time average monthly production has exceeded 100,000 bopd. DNO plans to increase
delieverability to 200,000 bopd by the end of 2014 and remains on schedule to achieve this.
A report prepared by independent oil and gas consultants DeGoyler and MacNaughton in March
2012 estimated proved plus probable reserves (2P) of 771 million barrels of oil, although
subsequent data suggest that this value should have been closer to 777 million barrels. In May
2014 DNO announced that the cumulative produce from Tawke had exceded 75 million barrels of
oil, and our view is that remaining reserves are around 702 million barrels of oil.
Tawke-1 and 1A tested 5,000 bopd and Tawke-2 tested 3,840 bopd. These results were used as
the basis for an early production plan, which was approved by the Kurdistan Regional
Government (KRG). The Tawke-2 appraisal well confirmed the western extension of the Tawke
structure which is indicated below.
Vertical wells Tawke-1 through to Tawke-19 mainly targeted the Tertiary and Cretaceous
reservoirs. Production rates tend to vary between 4,000-10,000 barrels of oil per day from
successful wells, with some such as Tawke-8 flowing as much as 17,000 bopd from four
combined tests. Tertiary and Cretaceous reservoirs flow 24 – 27° API oil with very low gas
content.
Deep well Tawke-17 was completed in early 2013 and discovered a reservoir in the Sargelu
Formation of the Upper Jurassic, more than 200m below the base of the main Cretaceous
reservoir. Testing of Tawke-17 produced approximately 1,500 barrels per day of 26-28 ºAPI oil.
Further deep appraisal wells (Tawke-29) are currently planned to assess the extent of the Jurassic
reservoir.
Between June and October 2013 the first two horizontal wells Tawke-20 and Tawke-23 were
brought onstream at an average rate 25,000 bopd and 32,500 bopd respectively. Subsequently
more horizontal wells were planned and spudded; Tawke-21, Tawke-22 and Tawke-24 are
horizontal wells, which target the main Cretaceous reservoir and produce consistently at flow
rates of around 9,000 bopd. The length of the horizontal sections in these wells ranges from 800-
980 metres, and each cuts through 7-10 fracture corridors. By the end of 2014 it is expected that
the total number of horizontal wells will be 9.
In October 2014 DNO indicated that it was logging the 834 metre horizontal section of the
recently drilled Tawke-28 well, with plans to place the well on production by early November.
Tawke-27 will spud shortly after.
1
This is for all gas thought to be present and is based on statements reported to have been made by DNO.
Table 3.69: Tawke Field Data
Parameter Value
(Upside Exploration
Gas (Billion Cubic Feet) 10
Potential)
Oil (Barrels per day) 50,000
Current Gas (Million Standard Cubic Feet per
7.5 (estimate)
day)
Production
Oil (Barrels per day) 2 200,000
Potential Gas (Million Standard Cubic Feet per
30 (estimate)
day)
Shiranish (Cretaceous)
Kometan (Lower
Producing Horizon(s) Cretaceous)
Quamchuga
(Lower Cretaceous)
Rock Type(s) Carbonates.
Upper Reservoir 1
Geology Reservoir Depth (Metres) (Shiranish) - 380
Lower Reservoir 2 ( )
Shiranish – 16
Porosity (%) Kometan - 15
Quamchuga - 14
Shiranish - 400
Permeability (mD) Kometan - 70
Quamchuga - 40
Shiranish - 30
Gravity (º API) Kometan, Quamchuga -
Oil
35
Sulphur Content (wt %) 2.6 - 3.0
Fluid
Gas-Oil Ratio (standard cubic feet/ 150
Properties
barrel)
Gas Hydrogen Sulphide Content (mol %)
Carbon Dioxide Content (mol %)
Molecular Weight
Total now Total in
future
Number of Producers 14 24
Subsurface
Number of Gas Injectors - 1
Existing Number of Water Injectors - 10
Facilities Total Number of Wells 14 35
Separation Capacity (bpd) 50,000
Compression Capacity (MMscfd)
Surface
Acid Gas Treatment Capacity -
(MMscfd)
2
This is based on statements reported to have been made by DNO and represents their view of production potential.
A further piece of key data we have been able to establish based on in country research and
production data gathered from a number of sources is the field’s production history. This is
presented in the table below on an average daily production basis; the table has been established
on yearly reports by DNO.
The original production sharing agreement was agreed between DNO and the Kurdistan Regional
Government (KRG) in June 2004. This agreement was amended to a ‘Revised Production
Sharing Agreement’ (RPSA) in March 2008.
In September 2014 Genel announced that operations in the KRI region remained safe and secure
and production at the Tawke field had risen to record levels alongside its Taq Taq field with a
combined production of 234,000 barrels of oil per day.
In October 2014 DNO took steps to mitigate delays to its 200,000 Barrel per day deliverability
target resulting from the withdrawal of third party contractors within the Kurdistan region. There
was an installation of a new 24 inch pipeline connecting the Tawke field to Faysh Khabur and
was slated to be finished by the end of 2014. The new pipeline will increase export capacity,
whilst other upgrades to infrastructure and facilities were progressing as normal in the Tawke
field.
Meanwhile current exports of Tawke oil to Turkey by the Kurdistan Regional Government
(KRG) account to 90,000 bpd and local sales decreased to 29,960 bpd during the third quarter of
2014.
In December 2014 DNO confirmed payment of 30 million USD from the Kurdistan Regional
Government for Tawke oil exports. The payment will be shared by DNO (20.625 Million USD)
and Genel (9.375 Million USD).
Investment Opportunity
DNO’s field development plan effectively targets the shallow lying oil containing reservoirs
whilst also investigating the deeper targets, and develops the field through a series of steps:
Implementation of a 3D seismic survey of the field targeting the shallow and deeper
reservoirs. Interpretation would be conducted using the survey plus the log data from the
wells drilled by DNO.
Drilling of around 19 wells to further target the shallow lying reservoir and the deep
reservoir. This would include producers, water injectors and gas injectors.
Implementation of a gas disposal scheme that recovers associated gas; compresses it and
reinjects it back into the Tawke reservoir.
DNO’s field development plan is diagrammatically represented in Figure 3.15below, while the
work scope we’d expect to be implemented to fully exploit the field along with associated costs is
detailed further in the tables below.
Figure 3.15: Tawke Project Development Plan
3
Time frame is our expectation of the time that will be required from making a decision to implement the full work
scope through to completion. Fundamentally we have assumed that this follows a normal construction path without
consideration of constraints - political, economic or other - that may act to restrain the schedule.
4
The cost ranges reflect the uncertainty associated with the actual work scope that will have to be implemented. At
this stage, not enough is known about the facilities to fully define the costs.
Table 3.72: Tawke Development Costs Summary
Time Cost Estimate
Project Rationale Frame (MillionUSD)4
(Years)3 Low How
Surface
DNO’s early Implement separation and storage system in
surface two stages: 1st stage - 30,000 barrel per day,
production 2nd stage – 20,000 barrel per day giving a
facilities total production of 50,000 barrels per day. 1–2 - -
(Already
executed by
DNO-Genel)
Field Expansion 3rd Stage - Expand surface facilities to
200,000 bdp to include gathering, water 413.9 679.2
2–3
injection, and gas reinjection to be completed
by the end of 2017.
Rounded Subtotal 413.9 679.2
Rounded Total 589.0 949.8
The minimum cost presented in the table above is based on the absolute minimum cost for
developing this field. We have also used our cost estimating software - NetCo$ter to evaluate the
work scope we believe will be required to achieve the production plateau targets associated with
the service contract; our figures are presented as the maximum cost.
In addition to development cost the consortium will spend a very significant amount on operating
costs. We have used our cost estimating software - NetCo$ter to estimate what these will be and
these estimates are provided below.
5
The cost ranges reflect the uncertainty associated with the actual work scope that will have to be implemented. At
this stage, not enough is known about the existing facilities to fully define the costs. Each element of operating cost
is additive, so as units are brought into production their operating cost is added to the existing base.
Stage 3 – Operation of surface
gathering, water injection, and gas
Operation of reinjection facilities to a total 26.5 37.1
2015
Facilities
capacity of 200,000 bpd to be
completed end of 2017.
Rounded Subtotal at Peak Production Year 68.9 122
General and Administration:
Stage 3 – Operation of surface
gathering, water injection, and gas
General and reinjection facilities to a total 8.0 11.1
2015
Administration
capacity of 200,000 bpd to be
completed end of 2017.
Rounded Subtotal at Peak Production Year 8.0 11.1
Rounded Total at Peak Production Year 80.1 139.5
This then is the technical basis for installing production facilities at this field. We have also
conducted a full economic assessment of this plan that can be found in our Iraq Fields Financial
Report. This is the sister publication to this report and it uses these costs as the basis for its
analysis.
Table of Contents1
1. Executive Summary ..................................................................................................................... 13
1.1. Oil and Gas Inventory ............................................................................................................ 13
1.2. Oil and Gas Industry .............................................................................................................. 15
1.2.1. Overall Status .................................................................................................................. 15
1.2.1.1. Opportunity .............................................................................................................. 15
1.2.2. Upstream ......................................................................................................................... 16
1.2.2.1. Oil............................................................................................................................. 16
1.2.2.1.1. Overall Status .................................................................................................... 16
1.2.2.1.1.1. Opportunity ................................................................................................ 17
1.2.2.1.2. Northern Folded Zone ....................................................................................... 19
1.2.2.1.2.1. Producing Oil Fields .................................................................................. 19
1.2.2.1.2.1.1 Status .................................................................................................... 19
1.2.2.1.2.1.2 Opportunity .......................................................................................... 19
1.2.2.1.2.2. Non-producing Oil Fields .......................................................................... 22
1.2.2.1.2.2.1 Status .................................................................................................... 22
1.2.2.1.2.2.2 Opportunity .......................................................................................... 23
1.2.2.1.3. Mesopotamian Basin ......................................................................................... 29
1.2.2.1.3.1. Producing Oil Fields .................................................................................. 29
1.2.2.1.3.1.1 Status .................................................................................................... 29
1.2.2.1.3.1.2 Opportunity .......................................................................................... 30
1.2.2.1.3.2. Non-Producing Oil Fields .......................................................................... 33
1.2.2.1.3.2.1 Status .................................................................................................... 33
1.2.2.1.3.2.2 Opportunity .......................................................................................... 34
1.2.2.1.4. Western and Southwestern Desert .................................................................... 39
1.2.2.1.4.1. Producing Oil Fields .................................................................................. 39
1.2.2.1.4.1.1 Status .................................................................................................... 39
1.2.2.1.4.2. Non-Producing Oil Fields .......................................................................... 39
1.2.2.1.4.2.1 Status .................................................................................................... 39
1.2.2.1.4.2.2 Opportunity .......................................................................................... 40
1
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