Iraq has signed deals with UAE-based Crescent Petroleum and two Chinese firms for the development of six oil and gas fields in the country. The move comes as the country seeks to produce much-needed natural gas for power stations and reduce imports that have been burdening its budget. The Crescent Petroleum contracts include three 20-year contracts to develop oil and natural gas fields in Iraq’s Basra and Diyala provinces. Crescent Petroleum plans to explore and develop Khider al-Mai, a third block in Basra province for oil and gas. The contracts will help produce more than 800 million standard cubic feet per day of natural gas, according to Iraq’s oil minister Hayan Abdel-Ghani.
United Arab Emirates-based Crescent Petroleum signed three 20-year contracts to develop oil and natural gas fields in Iraq’s Basra and Diyala provinces in northeastern Baghdad. The Crescent Petroleum contracts include the Gilabat-Qumar and Khashim fields in Diyala, which are expected to begin producing 250 million standard cubic feet per day of natural gas within 18 months, the company said. Crescent Petroleum also plans to explore and develop Khider al-Mai, a third block in Basra province for oil and gas.
Chinese companies Geo-Jade and United Energy Group Ltd have also signed deals for exploration and development rights in Iraq’s Huwaiza and Naft Khana oilfields and Sindbad oilfields near Basra. Iraq expects the new deals to help produce more than 800 million standard cubic feet per day of natural gas, according to the oil minister.
The new bidding round will include exploration blocks in Iraq’s north, central, and western regions, the oil minister said. The country heavily relies on Iranian gas imports to feed its power grid, and the deals are expected to help reduce this dependence. The new deals will also help create jobs and bring in much-needed revenue for Iraq, which has been struggling with an economic crisis and widespread protests over corruption and poor governance.
Iraq has been struggling to boost its oil and gas production due to a lack of investment, security concerns, and political instability. The country is also grappling with the impact of the COVID-19 pandemic, which has disrupted global energy markets and caused a sharp drop in oil prices. The new deals with Crescent Petroleum and the Chinese firms are expected to help Iraq address some of these challenges and increase its natural gas production, which is critical for its power sector.