Baghdad: Iraq’s strategic move to conduct an oil and gas licensing round for 29 projects signifies a pivotal step towards harnessing its vast gas reservoirs to fuel its nation and attract substantial investments.
The exploration blocks, strategically positioned across 12 governorates, predominantly in central and southern Iraq, now include, for the first time, an offshore exploration block in the Arab Gulf waters, expanding the scope of Iraq’s energy exploration endeavors.
China’s Zhongman Petroleum and Natural Gas Group (ZPEC) clinched victories in securing bids for the northern extension of the Eastern Baghdad field in Baghdad and the Middle Euphrates field spanning the southern provinces of Najaf and Karbala, after presenting the most competitive offers, as announced by the oil ministry.
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Additionally, Iraq’s KAR Group emerged victorious in securing a bid to develop the Dima oil field in the eastern Maysan province, as confirmed by the oil ministry.
Following Iraq’s last licensing round in 2018, labeled as the fifth, the current “fifth plus” round features a blend of projects from the previous round along with the introduction of a new sixth round comprising 14 projects, revealed Iraqi Oil Minister Hayan Abdel-Ghani.
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With over 20 companies pre-qualifying for participation, including entities from Europe, China, Arab nations, and Iraq itself, the absence of major U.S. oil companies in this round stands out.
Despite Iraq’s significant increase in oil production capacity from 3 million to approximately 5 million barrels per day (bpd) in recent years, challenges loom large, with industry giants such as Exxon Mobil Corp and Royal Dutch Shell Plc withdrawing from several projects due to unfavorable returns, casting uncertainty over future growth prospects.
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Moreover, the pace of developments has been hampered by the escalating focus among investors on environmental, social, and governance criteria, further complicating Iraq’s path towards energy sector expansion.
Iraq, once aspiring to rival top global producer Saudi Arabia with an output exceeding 12 million bpd, now faces a journey fraught with challenges as it navigates towards realizing its energy ambitions on the world stage.
