Iraq Signs MoU with Shell for Huge Petrochemical Plant

Posted on 11 April 2012. Tags: fertiliser, Petrochemicals, Shell
Iraq Signs MoU with Shell for Huge Petrochemical Plant

Iraq has signed a Memorandum of Understanding in Baghdad with Shell to make a technical and economic feasibility study to set up a major petrochemical plant, reports Aswat al-Iraq.

“Iraq has a big vision to cope with the big leaps in the oil sector in the coming few years through the use of the natural gas reserves to develop the Iraqi industry and to benefit from these materials to produce the basic materials for the petrochemical industries,” Mohammad Abdullah, undersecretary for companies’ affairs at the Ministry of Industry, said during the signing ceremony.

“There is a high level of coordination with the oil ministry regarding providing the raw materials necessary for the petrochemical industries and nitrogen fertilizers,” he added.

“The project will contribute in offering job opportunities for a large number of people and will decrease the unemployment rate.”

(Source: Aswat al-Iraq)
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Shell says sees no oil leaks from Gulf of Mexico wells
Thu, Apr 12 13:55 PM EDT
image

By Kristen Hays

HOUSTON (Reuters) - Royal Dutch Shell said an oil sheen near two of its offshore Gulf of Mexico oil and natural gas platforms was estimated to total about six barrels of oil and that its seabed wells showed no signs of leaks.

Shares of Shell traded on the New York Stock Exchange were up 39 cents, or less than 1 percent, at $68.14 at midday. The stock closed down less than 1 percent in London after falling as much a 5 percent earlier in the day, temporarily erasing about $5 billion in value from Europe's largest oil company by market capitalization.

The company, based in the Hague, said the source of the one-mile by 10-mile sheen was unknown.

News of the sheen came nearly two years after BP Plc's deep sea Macondo well blew out on April 20, 2010, killing 11 workers and spewing more than 4 million barrels of oil into the Gulf of Mexico.

The U.S. Bureau of Safety and Environmental Enforcement (BSEE), which regulates offshore oil and gas activity, said on Thursday that its personnel spotted the sheen near Shell's Mars and Ursa platforms and notified the company.

Shell said a Marine Spill Response Corp vessel with skimming and boom capability was on site near the platforms. The company also deployed two remote operating vehicles (ROVs) to inspect the seabed oil equipment in the area and to search for naturally occurring seeps in the ocean floor.

ROVs were assessing permanently plugged wells in the surrounding area "and a known natural sea floor seep located in proximity of the sheen," the BSEE said.

Shell spokeswoman Kelly Op de Weegh added that the ROVs were "checking the whole area," including wellheads, pipes and other equipment for both the platforms, and so far no leaks or plumes have been found.

The company said in a statement that although Shell is confident that the sheen did not originate from its operations, the company would continue to respond.

BSEE said it also has directed pipeline companies with operations in the area to survey their lines.

A U.S. Coast Guard helicopter also was sent to investigate the sheen at about 9 a.m. local time (1400 GMT).

"We are treating this very seriously, as we do all reports of possible pollution," Coast Guard Capt. Jonathan Burton said in a statement. "We will ensure that all measures are taken to fully investigate and, if necessary, mitigate any impact this could potentially have."

The earlier drop in the company's London-listed share price showed that investors remain anxious over potential oil accidents two years after the BP offshore spill, the worst ever in the United States.

Shell had reported the sheen to the National Response Center, which is run by the Coast Guard and monitors marine oil spills, pipeline leaks and other incidents of pollution.

Shell owns a 71.5 percent interest in Mars and a 45.4 percent stake in Ursa, and operates both. BP owns a 28.5 percent stake in Mars and a 22.7 percent interest in Ursa.

The Mars platform can produce up to 160,000 barrels of oil and 121 million cubic feet of natural gas per day. Ursa can produce up to 150,000 barrels of oil and 400 million cubic feet of gas per day.

Both are about 130 miles southeast of New Orleans, and are about seven miles apart.

The Marine Spill Response Corp is a nonprofit organization created in 1990 by the oil and shipping industries to enable members to fulfill requirements of the U.S. Oil Pollution Act of 1990.

(Additional reporting by Matt Daily in New York, Anna Driver in Houston and Adveith Nair in London; Editing by Helen Massy-Beresford, Sofina Mirza-Reid and Jim Marshall)

===============

Western oil firms remain as US exits Iraq

The end of the US military occupation does not mean Iraqis have full control of their oil. Dahr Jamail Last Modified: 07 Jan 2012 18:45 inShare 57EmailPrintShareFeedback Iraq plans to increase its oil production capacity up to 12 million barrels per day by 2017 [Al Jazeera] Baghdad, Iraq - While the US military has formally ended its occupation of Iraq, some of the largest western oil companies, ExxonMobil, BP and Shell, remain. On November 27, 38 months after Royal Dutch Shell announced its pursuit of a massive gas deal in southern Iraq, the oil giant had its contract signed for a $17bn flared gas deal. Three days later, the US-based energy firm Emerson submitted a bid for a contract to operate at Iraq's giant Zubair oil field, which reportedly holds some eight million barrels of oil. Earlier this year, Emerson was awarded a contract to provide crude oil metering systems and other technology for a new oil terminal in Basra, currently under construction in the Persian Gulf, and the company is installing control systems in the power stations in Hilla and Kerbala. Iraq's supergiant Rumaila oil field is already being developed by BP, and the other supergiant reserve, Majnoon oil field, is being developed by Royal Dutch Shell. Both fields are in southern Iraq. According to the US Energy Information Administration (EIA), Iraq's oil reserves of 112 billion barrels ranks second in the world, only behind Saudi Arabia. The EIA also estimates that up to 90 per cent of the country remains unexplored, due to decades of US-led wars and economic sanctions. "Prior to the 2003 invasion and occupation of Iraq, US and other western oil companies were all but completely shut out of Iraq's oil market," oil industry analyst Antonia Juhasz told Al Jazeera. "But thanks to the invasion and occupation, the companies are now back inside Iraq and producing oil there for the first time since being forced out of the country in 1973." "The last thing the US cares about in the Middle East is democracy. It is about oil, full stop." - Dr Abdulhay Yahya Zalloum Juhasz, author of the books The Tyranny of Oil and The Bush Agenda, said that while US and other western oil companies have not yet received all they had hoped the US-led invasion of Iraq would bring them, "They've certainly done quite well for themselves, landing production contracts for some of the world's largest remaining oil fields under some of the world's most lucrative terms." Dr Abdulhay Yahya Zalloum, an international oil consultant and economist who has spent nearly 50 years in the oil business in the US, Europe, Asia and the Middle East, agrees that western oil companies have "obtained concessions in Iraq's major [oil] fields", despite "there being a lack of transparency and clarity of vision regarding the legal issues". Dr Zalloum added that he believes western oil companies have successfully acquired the lions' share of Iraq's oil, "but they gave a little piece of the cake for China and some of the other countries and companies to keep them silent". In a speech at Fort Bragg in the wake of the US military withdrawal, US President Barack Obama said the US was leaving behind "a sovereign, stable and self-reliant Iraq, with a representative government that was elected by its people". Of this prospect, Dr Zalloum was blunt. "The last thing the US cares about in the Middle East is democracy. It is about oil, full stop." A strong partnership? A White House press release dated November 30 titled, "Joint Statement by the United States of America and the Republic of Iraq Higher Coordinating Committee", said this about "energy co-operation" between the two countries: "The United States is committed to supporting the Republic of Iraq in its efforts to develop the energy sector. Together, we are exploring ways to help boost Iraq's oil production, including through better protection for critical infrastructure." Follow Al Jazeera's continuing coverage of Iraq Iraq is one of the largest oil exporters to the US, and has plans to raise its overall crude oil exports to 3.3m barrels per day (bpd) next year, compared with their target of 3m bpd this year, according to Assim Jihad, spokesman for Iraq's ministry of oil. Jihad told Al Jazeera that Iraq has a goal of raising its oil production capacity to 12m bpd by 2017, which would place it in the top echelon of global producers. According to Jihad, Iraq's 2013 production goal is 4.5m bpd, and in 2014 it is 5m bpd. The 2017 goal is ambitious, given that Iraq did not meet its 2011 goal, and many officials say 8m bpd capacity is more realistic for 2017. Unexplored regions of Iraq could yield an additional 100bn barrels, and Iraq's production costs are among the lowest in the world. To date, only about 2,000 wells have been drilled in Iraq, compared with roughly one million wells in Texas alone. Globally, current oil usage is approximately 88m bpd. By 2030, global petroleum demand will grow by 27m bpd, and many energy experts see Iraq as being a key player in meeting this demand. It is widely understood that Iraq will require at least $200bn in physical and human investments to bring its production capacity up to 12m bpd, from its current production levels. Juhasz explained that ExxonMobil, BP and Shell were among the oil companies that "played the most aggressive roles in lobbying their governments to ensure that the invasion would result in an Iraq open to foreign oil companies". Iraq's oil reserves may be second only to Saudi Arabia's [EPA] "They succeeded," she added. "They are all back in. BP and CNPC [China National Petroleum Corporation] finalised the first new oil contract issued by Baghdad for the largest oil field in the country, the 17 billion barrel super giant Rumaila field. ExxonMobil, with junior partner Royal Dutch Shell, won a bidding war against Russia's Lukoil (and junior partner ConocoPhillips) for the 8.7 billion barrel West Qurna Phase 1 project. Italy's Eni SpA, with California's Occidental Petroleum and the Korea Gas Corp, was awarded Iraq's Zubair oil field with estimated reserves of 4.4 billion barrels. Shell was the lead partner with Malaysia's Petroliam Nasional Bhd., or Petronas, winning a contract for the super-giant Majnoon field, one of the largest in the world, with estimated reserves of up to 25 billion." Zalloum says there is a two-fold interest for the western oil companies. "There is development of the existing fields, but also for the explored but not-yet-produced fields," he said. "For the old fields, there are two types of development. One is to renovate the infrastructure, since for most of the past 25 years it has depreciated due to the sanctions and turmoil. Also, some of these fields have different stratum, so once they use innovative techniques like horizontal drilling, there is a huge potential in the fields they have explored." But there are complicating factors. As a spasm of violence wracked Baghdad in the wake of the US military withdrawal and political rifts widen, Iraq's instability is evident. "Iraq has lots of cheap-to-get oil, but it also has a multitude of problems - political, ethnic, tribal, religious etc - that have prevented them from exploiting it as well or as quickly as the Saudis," says Tom Whipple, an energy scholar who was a CIA analyst for 30 years. "Someday it may turn out that Iraq has more oil underground than Saudi Arabia. The big question is how stable it will be after the US leaves? So far it is not looking all that good." Jihad, Iraq's ministry of oil spokesman, however, said attacks against Iraq's oil pipelines have minimal effect on production capabilities, and claimed "sabotage will not affect our oil production and exports because we can fix these damages within days, or even hours". Whipple, a fellow at the Post-Carbon Institute, says Baghdad had driven a hard bargain with western oil companies. "The only reason they are participating is because everybody else is and they hope to get a foot in the door in case some new government in Iraq changes its policies to let other outsiders make more money. Remember it is not all the traditional western oil companies that are in there; the Chinese, Russians and Singapore all want a piece of the action." Wrong idea? Spokesman Jihad told Al Jazeera that the reason many Iraqis think western oil companies are operating in Iraq is simply to steal Iraq's oil. "These ideas were obtained during the regime of deposed dictator Saddam Hussein, and these are the wrong ideas," he said. "The future will help Iraqis understand these companies have come to work here to help Iraq sell its oil to help the people, and they work to serve the country." Jihad admitted that his media office works "to help Iraqis understand the nature of the work of these companies and their investing in Iraq". Despite the efforts of Jihad's office to prove otherwise, Iraqis Al Jazeera spoke with disagree. "If Iraq had no oil, would America have sacrificed thousands of its soldiers and hundreds of billions of dollars to come here?" - Basim al-Khalili "Only a naïve child could believe the Americans came here for something besides our oil," Ahmed Ali, an unemployed engineer, told Al Jazeera. "Nor can we believe their being here has anything to do with helping the Iraqi people." Basim al-Khalili, a restaurant owner in Baghdad's Karada district, agrees. "If Iraq had no oil, would America have sacrificed thousands of its soldiers and hundreds of billions of dollars to come here?" Oil analyst Juhasz also agrees. "The US and other western oil companies and their governments had been lobbying for passage of a new national law in Iraq, the Iraq Oil Law, which would move Iraq from a nationalised to a largely privatised oil market using Production Sharing Agreements (PSAs), a type of contract model used in just approximately 12 per cent of the world's oil market." She explained that this agreement has been summarily rejected by most countries, including all of Iraq's neighbours, "because it provides far more benefits to the foreign corporation than to the domestic government". But it has not been an easy road for the western oil companies in Iraq. "Major western companies, such as Chevron and ConocoPhillips, that had hoped to sign contracts were unable to do so. A third round [of contracts] took place in December 2010 and saw no major western oil companies (except Shell) win contracts. I believe that there was an Iraqi backlash against the awarding of contracts to the large western major oil companies. Thus, in December 2010, fields went to Russian oil companies Lukoil and Gazprom, Norway's Statoil, and the Angolan company Sonangol, among others." Unlike under Iraq's Oil Law, these contracts do not need to go through parliament, according to the central government. This means the contracts are being signed without public discourse. Dahr Jamail reports from Baghdad on the recent bombings which left scores dead across the country "The public is against privatisation, which is one reason why the law has not passed," added Juhasz. "The contracts are enacting a form of privatisation without public discourse and essentially at the butt of a gun - these contracts have all been awarded during a foreign military occupation with the largest contracts going to companies from the foreign occupiers' countries. It seems that democracy and equity are the two largest losers in this oil battle." Iraq's oil future Under the current circumstances, the possibility of a withdrawal of western oil companies from Iraq appears remote, and the Obama administration continues to pressure Baghdad to pass the Iraq Oil Law. Nevertheless, resistance to the western presence continues. "The bottom line is that it seems clear that the majority of Iraqis want their oil and its operations to remain in Iraqi hands," said Juhasz. "Thus far, it has required a massive foreign military invasion and occupation to grant the foreign oil companies the access they have thus far garnered (To amass; acquire)." While Iraq's security remains as volatile as ever, as does the political landscape - which can change dramatically at any moment - there is one thing we can always count on as being at the heart of these conflicts, and that is Iraq's oil. Follow Dahr Jamail on Twitter: @DahrJamail =============== AUTHOR INFORMATION Posted by: Ali Al-Saffar Ali is an economist and political analyst, working at a private UK-based company. He worked previously at the World Health Organisation and has an MSc in Development Studies from SOAS. You can follow him on Twitter (@alialsaffar). POST INFORMATION Posted on: January 10, 2012 Posted in: Iraqi Economy, Iraqi Politics Comments: 1 Comment You are here: Home » Perils of an oil economy PERILS OF AN OIL ECONOMY “No taxation without representation”. That was the slogan people in America used to use against the British colonialists. It’s short, salient and packs a punch. But how about “no representation without taxation”? You see, the oil-rich countries in the Gulf don’t really tax their citizens and are economically autonomous from society. They are not beholden to them in any way. When oil revenues come into the coffers, it is up to the king (or emir or sultan) to then bestow gifts upon his subject, who in turn, owe him complete loyalty . The state, the government, and the king become one – any act of dissent against the king is an act of disloyalty not only to the crown, but to the country as a whole. Iraq is the same. The social contract between the state/the government and the people is perverted. More importantly, the fact that it is so financially autonomous means that it can inflate, become a leviathan and intrude into aspects of people’s lives that it has no intrinsic right to get involved in. In Iraq, the government is the employer, the service provider and…well…the government. But how do we go about solving this problem? This is a tough one. The solution requires not only really uncomfortable adjustments in the way the economy is organised, but in people’s mentalities too. It has been done before though, in Norway, where a brilliant Iraqi, Farouk al-Kassim (article well worth a read), advised the government to make legislate that the only money it could make from oil, is the interest on the savings from the account the entire export revenue went to. This made sure that the government didn’t become too independently wealthy and that the economy didn’t become so over-reliant on a commodity that it would neglect other productive sectors and industries. This is probably a caricatured solution for Iraq, and I am not saying that this can ever be done in its entirety there. But there are clear lessons to be learnt from Norway’s Kassim-led success. =================== Shell profits up 54% to £2m an hour Union anger grows over recent closure of oil company's pension scheme despite ever-rising corporate earnings reddit this Comments (…) Terry Macalister guardian.co.uk, Thursday 2 February 2012 17.44 GMT Shell profits are up 54% for the full year. Photograph: Newcast/Shell Shell has been accused of "moral bankruptcy" by unions after unveiling a 54% rise in full-year profits less than a month after shutting its final salary pension scheme to new employees in Britain. The oil company reported global annual earnings of $28.6bn (£18bn) – more than £2m an hour – while paying out $10.5bn to shareholders during 2011 and promising to raise dividend levels further in the coming months. Peter Voser, Shell's chief executive, said "there is more [good profit] to come" as he outlined a new programme of increased global investment as well as cuts that he said would provide even better returns for investors. "We have worked hard to generate a strong pipeline of investment opportunities for Shell … All of this is supported by efficiency gains from our continuous improvement programmes," Voser said. But Europe's largest oil group was attacked for displaying "predatory capitalism" by Len McCluskey, leader of the Unite union. "Shell reminds us of the moral bankruptcy of the corporate elite. The company is needlessly closing its final salary scheme while posting colossal profits," he said. "Rather than provide security to its future staff and still make a profit, it has chosen greed. Shell is not alone: Unilever is needlessly slashing its employees' pension benefits when there is no financial reason for doing so." Shell, which has also upset staff by unveiling plans to shut its major research and development centre at Stanlow in Cheshire after disposing of its refinery there, said it was surprised by the attack. A spokesman pointed out that most government and private pension schemes paid in Britain were supported by Shell, which provides 12% of all dividends from the FTSE 100 index of leading firms. The Anglo-Dutch group is riding high on the back of surging oil prices – which were more than $30 per barrel higher last year than in 2010 – and booming demand for gas, but says it is making most of its money outside Britain and makes barely 1p per litre out of petrol sales. Voser pointed out that two thirds of the UK pump price went straight to the government as tax. He blamed near record prices for forecourt diesel on global crude market conditions and said Shell's UK retail operations continued to come under "very heavy competitive pressures". Shell would continue to invest in the North Sea in oil projects such as those it has west of Shetland, but said there was a need for the right "tax structures to keep the oil and gas industry alive here". The company was doing "our bit for balancing the books" of the Treasury through paying a heavy tax burden, it said, while denying that its recent sale of the Stanlow refinery to an Indian group had any impact on the wider refining and distribution problems that have recently hit the south-east of England. Shares in Shell rose 11% last year while arch-rivals such as BP saw no growth at all but on Thursday the Anglo-Dutch group's stock market valuation fell slightly as the City was disappointed by the financial performance in the last quarter of the year. Shell reported three-monthly earnings of $6.5bn, which was up on the same period last year but down quite heavily on the third quarter. Total oil and gas production in the fourth quarter was lower, at 3.3m barrels of oil equivalent per day compared with 3.49m barrels a year ago. Shell said it would increase annual production to 3.7m barrels by 2014, helped by a $100bn investment plan which started in 2010. The company said it would put much of its drilling efforts into the US and it now claims to have become the biggest driller – but not producer – in the deepwater Gulf of Mexico where BP used to reign supreme. Since the government moratorium on drilling in the Gulf, imposed following BP's Deepwater Horizon spill, was lifted, Shell has obtained permission to drill five wells during 2012. The company said it was treading carefully, meanwhile, in the Middle East in the wake of the Arab spring, but hopes to reveal soon how its exploration programme has been going in Saudi Arabia and when it plans to get back to similar work in Libya. Shale hopes Shell is hoping to turn the "shale gas revolution" sweeping north America into an export earner but also expects to see the controversial new energy source taking off in Europe once an "emotional" debate dies down. The Anglo Dutch oil company is looking at possible plans to ship surplus quantities of the fuel, as liquefied natural gas or "gas-to-liquid" processed fuel, from the US. Natural gas prices in north America have fallen to a 10-year low due to the discovery that gas can be extracted from shale rock using a technique known as hydraulic fracturing or "fracking". It uses an assortment of chemicals to release gas with tiny explosions and has upset environmentalists and some politicians. Peter Voser, chief executive of Shell, said $6bn would be spent worldwide on different kinds of shale gas operation, half of this in the US. The heavily populated nature of Europe versus the US made it more difficult to "frack" this side of the Atlantic, Voser conceded, but he said governments should "not take fast and emotional decisions" to restrict shale extraction. Shell expects Poland and even Germany to proceed with shale gas exploitation but it is also looking at operations in Ukraine and China. =========================

Shell to Award Deals to Develop Iraq's oil fields

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)

================

BP: Halliburton Destroyed Key Oil Spill Evidence

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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BP contract 'shielded Halliburton'SHAREPRINT EMAIL TEXT SIZE NORMALLARGEEXTRA LARGEBP owned the well that resulted in the catastrophic Gulf of Mexico oil spillAlso in World NewsExperts 'did not see Iran N-sites'One killed in Senegal protestsSouth Africa recalls 1.35m condomsMitt Romney wins Florida primaryIsraeli PM wins party leadershipWorld News HomeWednesday February 01 2012A US judge has ruled that Halliburton can avoid paying most of the pollution claims that resulted from the catastrophic Gulf of Mexico oil spill because it was shielded in a contract with well owner BP.However District Judge Carl Barbier said Halliburton was not exempt from paying punitive damages and civil penalties that arise from the April 20 2010 blow-out off the Louisiana coast, which could amount to billions of dollars.The judge also said Halliburton's indemnity could be voided if the company was found to have defrauded BP. He did not rule on BP's claims that Halliburton committed fraud by declaring the cement safe to use.Houston, Texas-based Halliburton supplied cement for the ill-fated Macondo well that exploded in the Gulf of Mexico and US government investigators have found that the cement failed to seal to the well properly.The cement job was one of several factors that investigators said contributed to the blow-out that killed 11 workers and led to the release of more than 200 million gallons of oil.In court filings, BP has accused Halliburton of hiding information about cement tests and defrauding BP by telling the company that the cement was safe to use. Halliburton says it did not conceal information or commit fraud.Both sides claimed victory on Tuesday.BP touted Judge Barbier's ruling as a "strong signal" that Transocean and Halliburton "would be held accountable". "These two decisions should put an end to the attempts by Transocean and Halliburton to avoid their obligations," BP said. The company added that Halliburton "at a minimum" faced paying punitive damages and civil penalties for its role in the disaster.Beverly Blohm Stafford, a Halliburton spokeswoman, said the company agreed with the ruling "to the extent that it requires BP to honour its contractual indemnity obligations".The ruling came in advance of a February 27 non-jury maritime-law trial in New Orleans to determine who was at fault for the blow-out that led to the nation's largest offshore oil spill. Transocean, BP and Halliburton have been sparring over what caused the spill.==============Majnoon to hit production target, not landminesBy BEN LANDO of Iraq Oil Report Published February 8, 2012 The road to the Majnoon oil field is paved through the past. Communities of farmers used to thrive here, but their marshlands were drained by a dictator and became a new desert; now the villages are impoverished, despite Basra province's increasing oil production.As Royal Dutch Shell leads a project to boost Majnoon's production, that history is being replaced with the infrastructure the country needs for a fighting chance to rebuild itself.The Majnoon team – Iraq's state-run South Oil...==============You are here: Home » Oil » Production & Exports » Q&A: Mahdi Badi of the South Oil CompanyQ&A: Mahdi Badi of the South Oil CompanyMahdi Badi, a South Oil Company official and chairman of the Majnoon joint management committee, at the opening of the Majnoon jetty Feb. 7, 2012. (ALI ABU IRAQ/Iraq Oil Report)By BEN LANDO of Iraq Oil Report Published February 8, 2012 Mahdi Badi is the Oil Ministry's point man on two of Iraq's most important projects: the development of the super-giant Majnoon field and the construction of a new southern oil export facility.As the chairman of Majnoon oil field's joint management committee, Badi sits at the head of the table with officials from Royal Dutch Shell and Malaysia's Petronas, the companies developing of the 12 billion barrel field.As that field jumps from its current production of 54,000 barrels per day (bpd...

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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.
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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.
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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)