Iraq keeps the keys to Western Desert
Upstream, 10.12.2010
Play closed to foreign companies for now as government sets future strategy
Iraq is taking its time opening up the Western Desert to foreign companies and will limit any future development to gas resources there, keeping back crude for later exploitation. Iraq's strategy over the unexplored gas-rich Western Desert was spelled out to Upstream by Thamir Ghadhban, former oil minister and now head of a prime ministerial advisory commission. "I can't say when (we'll move on the Western Desert). We want to develop the idea," he said on any timing for a licensing round for the area, which was blocked off in preparation for possible work by Russian and other companies before Saddam Hussein was ousted in 2003.
"If there is any oil discovery it will go to the government, because we are (already) developing a huge (oil) capacity," he said..
"We can't really add more and more... just spending money on adding capacity." Over the past year, Iraq has awarded a large number of oilfield development contracts with the potential of increasing the country's crude capacity to 12 million barrels per day by the end of the decade, but with many experts questioning the wisdom and practicality of doing so. Given the poor state of the country's infrastructure, the government is not in a rush to exploit even the gas resources in the Western Desert. However, any gas discoveries in the Akkas region in the west near the Syrian border and up to the Euphrates "shall be developed", Ghadhban told an Iraq conference in London. "We envisage the birth of a new and significant gas province round Akkas", to supply the country and subsequently for export, he said. Akkas and the smaller nearby Siba field were recently assigned to the Kogas-KazMunaiGaz and Kuwait Energy-TPAO partnerships, respectively..
Akkas has estimated reserves of nearly 6 trillion cubic feet and could form the basis for exports through Syria, but the contract has not been signed yet because of protests by the people of Anbar province, who want the gas to supply local markets..
Both gas and crude reserves in the Western Desert are believed to be very large - with some experts earlier this decade saying the area could hold more than 50 billion barrels of recoverable oil.
Shell, which is hoping to finalise a big gas gathering project in Basra soon, was at one time looking at the Western Desert for exploration acreage.
Russia's Tatneft and Stroytransgaz had pre-war arrangements for blocks 4 and 9 in the Western Desert. Pertamina of Indonesia had an exploration contract for Block 3, while Dublin-based Petrel Resources was hoping to explore Block 6.
