Roaring back to life: Iraq's upstream oil and gas sector sees revival in activity
Duo lines Garraf bit
Malaysia's Petronas and Japan Petroleum Exploration, known as Japex, are planning to award shortly a deal to drill several wells at Iraq's untapped Garraf oil field in southern Iraq, a company executive said.
The consortium is planning to drill two appraisal wells at Garraf this year starting in November, he said.
We have issued a tender but we haven't awarded it yet," the executive told Dow Jones Newswires.
The Petronas-Japex alliance was awarded the deal to develop Garraf, with estimated proven oil reserves of one billion barrels, during the country's second licensing auction held in Baghdad in December last year.
The executive said the consortium is in discussions with tribesmen who had allegedly refused to cede their ancestral lands peacefully without a cash payment from the two companies.
"We are in discussions with them," the executive said.
The alleged extortion drew condemnation from the Iraqi oil ministry, and the tribal sheiks have since denied any threat of violence, saying that they merely approached the two companies with a request.
Local leaders in Dhi Qar province, the location of Garraf oilfield, appear to have helped mitigate the tribal pressures, an Iraqi oil industry source said.
The companies pledged to boost crude oil production from Garraf to 230,000 barrels a day in 2016 and accepted $1.49 for each barrel produced.
Petronas holds 45% stake in the venture, Japex owns 30%, while the remaining 25% sake is owned by Iraq's state oil company.
