Shell and its Iraqi state partner are in the process of awarding a deal to drill new oil wells at the super giant Majnoon oil field in southern Iraq, the head of Iraq’s state-run South Oil Co., Dhiaa Jaafar, said on Tuesday.
Dow Jones reports that Shell, which partnered Malaysia’s state-run Petronas to develop Majnoon, will also award engineering, procurement and construction contracts to build various production installations at the field, an Iraqi oil industry source familiar with the project said.
Jaafar told Dow Jones Newswires that both deals have not yet been awarded but they are “in process.” He gave no further details.
Separately, an Iraqi oil industry source said that firms including Halliburton, Weatherford International, and Petrofac have been invited to submit bids for these two tenders.
A Shell executive contacted by Dow Jones refused to comment.
Shell said earlier that it was planning to drill 15 new wells over the next two years at Majnoon. This would help lift production to 175,000 barrels a day by 2012 from the current level of 45,000 barrels a day.
The Anglo-Dutch giant and Petronas were awarded a contract in December to develop the Majnoon field, which is located in Basra governorate and holds some 12.6 billion barrels of proven oil reserves. Shell owns 45% of the venture and Petronas 30%, with Iraq’s state-run Missan Oil holding 25%.
Halliburton and Weatherford are already involved in oil services projects in southern Iraq. Petrofac said last month that it was establishing a presence in Iraq as it moves to increase its massive order book of projects.
World oil companies are moving ahead with development work at oil fields despite a political vacuum in Iraq after a general election in March produced no outright winner and raised concerns about increased violence in the country. U.S. Vice President Joe Biden concluded a visit to Baghdad on Monday, trying to mediate a solution among the various political blocs.
Shell is still keen to capture and sell gas in Iraq. As we reported last week, the Iraqi cabinet last week ratified a $12.5 billion deal with Shell and Mitsubishi to develop a gas-structure project in southern Iraq, paving the way for a final signature of the deal.
Iraqi officials said that the venture could produce up to 2.5 billion cubic feet a day when the project is developed.
Shell also partnered with ExxonMobil won a deal to develop the prized West Qurna Phase 1 oil field in southern Iraq. ExxonMobil holds the majority stake in that field.
(Source: Dow Jones)
Halliburton signed the one-year contract with Shell on Tuesday to develop the Majnoon oilfield, according to a media source from Shell.
Hanadi al-Salman told Aswat al-Iraq news agency that, “according to the new deal, Halliburton will set up operation centers to dig 15 new wells,” he added.
When the contract win was originally announced in August, its estimated value was $150m.
A consortium including Royal Dutch Shell PLC and Malaysia’s Petronas have the contract to redevelop Iraq’s Majnoon oil field, one of the largest oil fields in the world.
Although the companies’ fee for raising output is considered small, it represents an important foothold in a country that potentially has massive untapped oil resources, said ING analyst Jason Kenney.
The Majnoon field, located in southern Iraq, holds some 12.8 billion barrels of oil reserves. The Iraqi state will hold a 25% interest in the licence, Shell will hold a 45% share and Petronas 30%.
(Source: Aswat al-Iraq)
Halliburton (NYSE:HAL) has been awarded a contract by Eni to provide a range of integrated energy services for the redevelopment of the Zubair field in southern Iraq.
Work for the multi-million dollar contract is underway. Halliburton will perform services such as wire-line logging, perforating, acidizing and well testing on 20 wells.
“We are committed to providing Eni the critical services required to deliver on its goal of expanding production over the next several years,” said Dave Lesar, Halliburton’s Chairman, President and CEO.
“Halliburton has made a strategic investment in our Iraqi infrastructure and the award of this contract, coupled with the recent letter of intent awarded by Shell and its partners, demonstrates that we have the technology and people in place to deliver in Iraq.“
Further to our report last week Halliburton has confirmed that it has been awarded a letter of intent by Shell Iraq Petroleum Development B.V. for the development of the Majnoon field in Southern Iraq.
Dow Jones suggests the contract for the 15 wells could be worth $150m.
The giant Majnoon field is one of the world’s largest oilfields. The letter of intent provides that Halliburton will serve as project manager for the development work, in affiliation with Nabors Drilling and Iraq Drilling Company (IDC). The contract is still subject to final approval by the appropriate Iraqi authorities.
Shell is lead operator and holds a 45 percent share, partner Petroliam Nasional Berhad (Petronas) holds 30 percent and the Iraqi state holds 25 percent of the participating interests in all licenses. Shell has announced that the consortium intends to increase production from the current ~45,000 barrels of oil per day to a targeted production plateau of 1.8 million barrels of oil per day.
“Halliburton has made a sizeable investment in Iraq and we look forward to providing services to Shell and the consortium in order to increase production at this historic oil field,” said Dave Lesar, Halliburton’s Chairman, President and CEO. “We have in place the technology, equipment and personnel to ensure that we deliver the solutions that will help our customers in this region to meet their production goals.”
Halliburton has been active in the Middle East since 1946. Currently, Halliburton has more than 4,000 employees in the Middle East, and construction on phase I of Halliburton’s 400-man base in Burjisia, Iraq is complete.
(Sources: Halliburton, Dow Jones)
Halliburton (NYSE: HAL) has been awarded a wellwork integrated services contract by ExxonMobil Iraq Ltd. for refurbishment of wells in the West Qurna (Phase 1) field in southern Iraq.
Halliburton will provide on-site logistics and technical support for both rigless and rig-assisted workovers. Other services provided by Halliburton include provision of a workover rig, coiled tubing, slickline services, logging, production enhancement and well testing.
“We believe Halliburton’s strong presence in Iraq, coupled with our technical leadership, was a factor in securing this contract from ExxonMobil Iraq Limited,” said Dave Lesar, Halliburton’s Chairman, President and CEO (pictured).
“We’re pleased to see our investment and commitment to provide services within Iraq being recognized by companies such as ExxonMobil and its West Qurna (Phase 1) project co-venturers.”
Exxon plans to drill more than 1,000 new wells at West Qurna 1.
Halliburton is scheduled to release its third-quarter earnings on Monday, the first major oil services to report. ExxonMobil releases its third quarter results on Oct. 28.
===
Reuters
Shell's big bets are paying off
(The author is a Reuters Breakingviews columnist. The opinions expressed are her own)
By Fiona Maharg Bravo
MADRID, July 28 (Reuters Breakingviews) - For global oil and gas groups, the days of drilling a hole in the ground and simply sucking out the black stuff are long gone. They must push the frontiers of exploration. Royal Dutch Shell is doing this with large pioneering projects such as the one which sees it building a floating liquid natural gas (LNG) vessel several times the weight of the Titanic. Technology gives Shell a distinct advantage despite the challenge of making the economics work.
It hasn't been an easy ride. For years, Shell was the oil major with high capital expenditure and lacklustre production. The Anglo-Dutch group has spent $30 billion and three decades making big bets on high tech, risky projects. It plans to spend a mind-boggling $100 billion more from 2011 to 2014. The mammoth floating vessel 200 kilometers off the coast of Australia will allow Shell to access gas in deep sea waters in fields that would otherwise be too difficult or costly to develop. The Pearl gas-to-liquids project in Qatar will allow Shell to convert cheaper gas into better margin liquids.
Numbers posted on July 28 show that the strategy is beginning to bear fruit. The Pearl project delivered its first cargo in June. The LNG project in Qatar is fully ramped up. Shell reported a 2 percent drop in production in the second quarter. But strip out asset sales, and production rose 2 percent. But more than half of the expected 400,000 barrels a day from the mega-projects in 2011 is yet to come on stream, according to UBS estimates. Importantly, those barrels are increasingly profitable, with cheap gas sold on contracts linked to the dearer oil price.
Being a first-mover in ground-breaking technology gives Shell a head start, but the long lead-times on the projects, and the risks that come with adventurousness, makes the economics challenging. Shell is gradually improving its return on average capital employed, to 14.8 percent in the second quarter of the year. But it still has a long way to go to catch up to some peers, like Exxon.
By the middle of the decade, Shell will get maybe half of its production from "unconventional" sources. With national oil companies increasing protective, Shell understands better than most that oil majors must push the boundaries if they are to push forward.
CONTEXT NEWS
-- Royal Dutch Shell reported current cost of supply earnings of $8 billion in the second quarter on July 28, a 77 percent rise against the same period a year earlier. Stripping out one-offs, CCS earnings were $6.6 billion, fractionally ahead of consensus forecasts. The growth was driven in part by strong sales in liquefied natural gas.
-- Oil and gas production was 2 percent lower in the quarter at 3.05 million barrels of oil equivalent per day, due to field sales and weak European gas demand caused by warm weather. Excluding divestments(To deprive, as of rights or property; dispossess.), output rose 2 percent.
-- Shell has started three major new projects in the first half of the year, including the first shipments from its Pearl gas-to-liquids (GTL) plant in Qatar. These projects are expected to deliver over 400 thousand barrels of oil equivalent per day, after some $30 billion of investment. Shell also decided to push ahead with Prelude Floating Liquid Natural Gas project, in Australia. This would be a first for the industry.
-- Cash flow from operating activities for the second quarter of 2011 was $10 billion, against $8.1 billion in the same quarter last year. Excluding net working capital movements, cash flow from operating activities was $12.3 billion, compared with $8.6 billion in the same quarter last year.
((fiona.bravo@thomsonreuters.com))
(Editing by Robert Cole and David Evans)
NEW ORLEANS (AP) — BP in a high-stakes court filing on Monday accused Halliburton of destroying damaging evidence about the quality of its cement slurry that went into drilling the oil well that blew out last year and caused the worst U.S. offshore oil spill.
BP accused Halliburton of having intentionally destroyed evidence about possible problems with its cement slurry poured into the deep-sea Macondo well about 100 miles (160 kilometers) off the Louisiana coast. An oil well must be cemented properly to avoid blowouts.
Also in the documents filed in a New Orleans federal court, BP accused Halliburton of failing to produce incriminating computer modeling evidence. BP accused Halliburton of claiming the modeling is gone.
BP asked U.S. District Judge Carl Barbier to penalize Halliburton and order a court-sponsored computer forensic team to recover the missing modeling results.
Halliburton did not return a call seeking comment but told other media outlets that the accusations were untrue.
The allegations in the 310-page motion ratcheted up the showdown among BP PLC and contractors, Halliburton and Transocean Ltd. The three companies have been sparring over blame for the April 2010 Deepwater Horizon blast, which killed 11 workers and led to the release of 206 million gallons (780 million liters)of crude oil into the Gulf of Mexico. So far, BP, the majority owner of the Macondo well, has footed the bill for the emergency response and cleanup.
Also involved are Anadarko Petroleum Co. and Cameron International Corp.
The first trial over the Deepwater Horizon disaster is scheduled to start Feb. 27 in New Orleans. The first leg is expected to take about three months and determine the liability of each company involved in drilling the Macondo well. There will be other phases over cleanup costs, punitive damages and other claims.
Federal and independent investigations of the disaster have found fault in Halliburton's cement job because it failed to properly plug the well. Halliburton used a foamy cement slurry.
In Monday's court filing, BP accused Halliburton employees doing an internal investigation of the Macondo disaster of discarding and destroying early test results they performed on the same batch of cement slurry used in the Macondo well.
BP said Halliburton's chief cement mixer for Gulf projects testified in depositions that the cement slurry seemed "thin" to him but that he chose not to write about his findings to his bosses out of fear he would be misinterpreted.
"I didn't want to put anything on an email that could be twisted, and turned," Rickey Morgan, the Halliburton cement expert, said in depositions. He worked at a laboratory in Duncan, Oklahoma.
"Upon reviewing these latest testing results, Halliburton employees destroyed records of the testing as well as the physical cement samples used in the testing," BP alleged.
================
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Basra gains clout amidst protests
Faisal Khalaf, deputy director general of the South Oil Company (right), Maeen al-Assadi, deputy Basra province governor (third from right) and other political officials at the Feb. 7, 2012, opening of the jetty at the Majnoon oil field, operated by Royal Dutch Shell. (BEN LANDO/Iraq Oil Report)
Faisal Khalaf, deputy director general of the South Oil Company (right), Maeen al-Assadi, deputy Basra province governor (third from right) and other political officials at the Feb. 7, 2012, opening of the jetty at the Majnoon oil field, operated by Royal Dutch Shell. (BEN LANDO/Iraq Oil Report)
By Staff of Iraq Oil Report
Published February 15, 2012
Hundreds of Basrawis gathered in protest near the Majnoon oil field Tuesday to demand job opportunities - the latest expression of grievances by locals who say they are not benefiting from the province's oil wealth.
"There is a wide range of corruption, nepotism and clientelism that is controlling the recruitment process of the companies in our region," said Falah Mutar, the leader of the protest. "We demand the security authorities hold the negligent accountable."
About 100 people gather...
أهالي ناحية النشوة في البصرة يتظاهرون ضد شركة شل للمطالبة بتوظيفهم في حقل مجنون
الكاتب: MB
المحرر: SS
الثلاثاء 14 شباط 2012 11:06 GMT
حقل مجنون
السومرية نيوز/ البصرة
تظاهر العشرات من سكان ناحية النشوة، في محافظة البصرة، الثلاثاء، ضد شركة رويال دتش شل الهولندية البريطانية احتجاجاً على عدم توظيفهم في حقل مجنون النفطي القريب من مناطقهم، والذي تتولى تطويره مع شركات أخرى وفقاً لجولة التراخيص الثانية.
وقال أحد المتظاهرين ويدعى علي حسين في حديث لـ"السومرية نيوز"، إن "العشرات من أبناء ناحية النشوة (نحو 100 كم شمال شرق مدينة البصرة) خرجوا اليوم بتظاهرة احتجاجية ضد شركة شل التي تقوم بتطوير حقل مجنون وقطعوا أحد الطرق المؤدية إلى مقر الشركة داخل الحقل"، مبيناً أن "قوة من مديرية شرطة نفط الجنوب تدخلت بسرعة وأعادت فتح الطريق".
وأضاف حسين أن "المتظاهرين طالبوا الشركة بمنحهم الأفضلية في التوظيف للعمل في الحقل"، مؤكداً أنهم "يسكنون مناطق قريبة جداً من الحقل، ويعانون من أضرار بيئية ناجمة عن أنشطة ومشاريع الشركة".
بدوره، قال متظاهر آخر يدعى عباس محسن في حديث لـ"السومرية نيوز"، إن "إدارة شل تعهدت سابقاً بتوظيف أكبر عدد من أبناء الناحية، إلا أنها اكتفت بتوظيف عدد منهم بالاتفاق مع شيوخ عشائر ومسؤولين محليين، وتركت الآخرين بلا عمل"، موضحاً أن "بعض المتظاهرين سبق وان عملوا بأجر يومي في مشاريع للبناء ونقل والمعدات داخل الحقل إلا أن شركة شل سرحتهم بعد انجاز تلك المشاريع، وهم يطالبون بتشغيلهم في مشاريع أخرى قيد التنفيذ".
من جانبه، قال رئيس المجلس المحلي لناحية النشوة خيري عبد الزهرة في حديث لـ"السومرية نيوز"، إن "المتظاهرين طالبوا أيضاً شركة شل بتحسين الوضع الخدمي في الناحية لان أنشطتها أثرت سلباً على البنية التحتية الخدمية في الناحية وبخاصة الطرق والجسور"، مضيفاً أن "المجلس المحلي لم يشارك في التظاهرة لكنه سلم مطالب المتظاهرين إلى الحكومة المحلية التي وعدت بالتفاوض مع إدارة شركة شل بشأنها"، موضحاً أن "رد إدارة الشركة إن كان سلبياً فان المجلس المحلي للناحية سوف يتولى تنظيم تظاهرات سلمية حاشدة".
وأكد عبد الزهرة أن "شركة شل والشركات الأجنبية المتعاقدة معها قامت بتوظيف الكثير من أبناء النشوة لكننا نطالب بزيادة حصة الناحية من فرص العمل"، مؤكداً أن "النشوة يعيش فيها ما لا يقل عن 30 ألف شخص، وتقع معظم أراضيها ضمن الحدود المفترضة لحقل مجنون"، مبيناً أن "الحقل يمتد لمسافات بعيدة بحيث يشمل أجزاء من ناحية الدير، وقرية الزريجي بأكملها، إضافة الى مناطق ريفية أخرى".
يذكر أن حقل مجنون هو أحد أكبر خمسة حقول نفطية في العالم، وتعتقد وزارة النفط العراقية انه يحتوي على خزين يصل الى 38 مليار برميل، وكانت بدأت عمليات استخراج النفط منه في العام 1978، ثم توقفت كلياً بسبب نشوب الحرب العراقية الإيرانية (1980-1988)، خاصة وان موقع الحقل تحول خلال الحرب الى جبهة مستعرة لقربه الشديد من الأراضي الإيرانية، وفي أواخر العام 2009 وصل انتاج الحقل بالجهد الوطني الى 90 ألف برميل يومياً، وفي العام 2010 تعاقدت وزارة النفط ضمن جولة التراخيص الثانية مع ائتلاف تقوده شركة رويال دتش شل البريطانية الهولندية لتطوير الحقل، بحيث باتت تمتلك الشركة المذكورة 45% من أسهم المشاركة في تطوير الحقل، فيما تمتلك حليفتها شركة بتروناس الماليزية 30% من الأسهم، اما شركة نفط ميسان التابعة لوزارة النفط فانها تحتفظ بحصة تبلغ 25% من أسهم المشاركة.
وينتج الحقل حالياً 75 ألف برميل يومياً، من المؤمل أن يرتفع انتاجه أواخر آب القادم الى 175 ألف برميل يومياً، حتى يصل الى 1.8 مليون برميل بعد ست سنوات، وتتولى حالياً شركة هيليبرتون الأميركية حفر 15 بئراً نفطية في مواقع مختلفة من الحقل، فيما تقوم شركة صينية بمد أنابيب الجريان بين الآبار ومحطات عزل الغاز داخل الحقل الذي تحيط به مناطق ريفية يعيش سكانها في ظل ظروف اقتصادية قاسية.
============
Hand, the people of ecstasy in Basra demonstrating against Shell to claim their employment in the Majnoon field
Author: MB
Editor: SS
Tuesday 14 شباط 2012 11:06 GMT
Majnoon
Alsumaria News / Basra
Dozens of residents in terms of euphoria, in Basra province, Tuesday, against the Royal Dutch Shell Dech British protest against the lack of employment in the Majnoon oil field near their areas, and whose development with other companies according to the second licensing round.
Said one protester, Ali Hussein, in an interview for "Alsumaria News", "dozens of people on the orgasm (about 100 km northeast of the city of Basra) came out on a demonstration in protest against Shell that is developing the Majnoon field and cut off one of the roads leading to the company's headquarters in field, "noting that" the strength of the Police Directorate of the South Oil quickly stepped in and reopened the road. "
Hussein added that "the demonstrators demanded the company by giving them preference in hiring to work in the field," asserting that they "live in areas very close to the field, and suffer from environmental damage caused by the activities and projects of the company."
In turn, said protesters last named Abbas Mohsen in an interview for "Alsumaria News", "Management Shell pledged earlier employing the largest number of people speaking, but it is merely employing a number of them in agreement with tribal leaders and local officials, and left others out of work," explaining that "Some of the demonstrators had previously worked on projects paid for construction and transport and equipment within the field, but the Shell Sarhthm after the completion of these projects, they are demanding through labor in other projects under implementation."
For his part, the head of the local council in terms of euphoria Khairi Abdul-Zahra in an interview for "Alsumaria News", "The demonstrators also called for Shell to improve the situation service in the area because their activities have impacted negatively on infrastructure services in the area, especially roads and bridges," adding that "the the local council did not participate in the demonstration, but the demands of the demonstrators handed to the local government, which promised to negotiate with the management of Shell on them, "explaining that" the administration's response that the company was negative, the local council for the area would be responsible for organizing a peaceful mass demonstrations. "
The Abdul-Zahra that "Shell and foreign companies contracting with the employment of many of the sons of pleasure, but we call for increasing the share aspect of the job," asserting that "orgasm live where at least 30 thousand people, located most of the territory within the limits assumed for the Majnoon field," , noting that "the field extends over long distances so as to include parts in terms of the monastery, and the entire village Zriga, in addition to other rural areas."
The Majnoon field is one of the five largest oil fields in the world, and believes the Iraqi Oil Ministry that it contains reserves of up to 38 billion barrels, and they began to extract oil from it in 1978, then stopped completely because of the outbreak of Iran-Iraq war (1980-1988) , especially since the site field transformation during the war to the front raging for so close to the Iranian territory, and in late 2009, the production of the field of national effort to 90 thousand barrels per day, and in 2010 contracted by the Ministry of Oil in the second licensing round with a consortium led by Royal Dech Shell, British Dutch to develop the field, so that now the company has listed 45% of the shares of participation in the development of the field, while its ally owns Malaysia's Petronas 30% of the shares, while the Maysan Oil Company of the Ministry of Oil, it retains a share of 25% of the shares involved.
The field produces currently 75 thousand barrels per day, it is hoped to increase its production in late August next to 175 thousand barrels per day, even up to 1.8 million barrels, after six years, and currently holds the company Hilliberton U.S. drill 15 oil wells in different locations of the field, while the company Chinese extension tubes between the wells and flow stations, gas insulation inside the field that is surrounded by rural areas, people live under conditions of economic adversity.
===========
Q&A: South Oil Co. chief Dhia Jaffar
Dhia Jaffar, director general of the South Oil Company, at the Feb. 12, 2012, opening of the first single point mooring system. (BEN LANDO/Iraq Oil Report)
Dhia Jaffar, director general of the South Oil Company, at the Feb. 12, 2012, opening of the first single point mooring system. (BEN LANDO/Iraq Oil Report)
By Ben Lando of Iraq Oil Report
Published February 15, 2012
At just over 2 million barrels per day (bpd) in output, Iraq's state-run South Oil Company (SOC) is one of the biggest producers in the world.
It is certainly the dominant company in Iraq. Iraqi capacity is slated to rise from 2.9 million bpd to more than 13.5 million bpd in seven years, and most of that growth will come from the fields of Basra, where SOC is headquartered.
Dhia Jaffar, the SOC's director general, has just overseen the completion of the first leg of a 4.5 million bpd capac...
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OAPEC to discuss oil, gas pipelines at meeting
Wed Feb 15, 2012 12:05pm GMT
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DUBAI Feb 15 (Reuters) - Arab oil officials plan to discuss oil and gas pipeline projects, amid heightened concerns about the Strait of Hormuz, at a meeting of the Organization of Arab Petroleum Exporting Countries (OAPEC) scheduled for next week.
The conference will be held Cairo on Feb. 21-23, OAPEC said on its website on Tuesday. It was postponed from November, when the city was racked with severe protests. Ministers including from the Gulf states will not be attending, the organizers said.
Iran has threatened to close the Strait of Hormuz if the West imposes sanctions on its oil. The narrow strip of water that separates Oman and Iran is the world's most important oil shipping lane, which connects the biggest Gulf producers such as Saudi Arabia, Iran, Iraq and the United Arab Emirates with world markets.
OAPEC will hold the event jointly with Japan Cooperation Center Petroleum (JCCP), the organizers said. (Reporting by Amena Bakr, editing by Jane Baird)
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