Cyril Widdershoven
Dr. Cyril Widdershoven is a long-time observer of the worldwide power market. Presently, he holds a number of advisory positions with worldwide suppose tanks within the Center…
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By Cyril Widdershoven – Mar 17, 2023, 6:00 PM CDT
- Iraq plans to open 7 new small-and-medium sized refineries.
- Baghdad’s rapprochement with the KRG might stabilize oil manufacturing within the nation’s North.
- UAE oil hub Fujairah has seen elevated transit flows and demand for crude and product storage.
Oil markets have been affected by monetary market challenges, inflation, and the conflict in Ukraine. Nonetheless, Arab Gulf nations stay resolutely optimistic, evidenced by new refinery and storage plans being developed in Iraq and the UAE.
This week, Iraqi minister of oil Hayan Abdul Ghani mentioned that Baghdad has invited traders to arrange seven new oil refineries all through the nation. Ghani mentioned additionally that bidding has opened for 3 refineries at the moment, whereas presents for 3 different ones are anticipated on April 2. Ghani additionally reiterated that the brand new investments “represent a shift within the authorities’s technique in the direction of encouraging international funding in oil refining and opening new horizons for worldwide corporations and the native personal sector on this trade”. Sources have indicated that the primary three refinery initiatives entail a 50,000 bpd refinery within the Southeastern Maysan Governorate, a 70,000 bpd refinery within the Nineveh Governorate in North Iraq, and a 30,000 bpd refining unit in Basra. The April 2 presents are for a 50,000 bpd refinery within the Southern Dhi Qar Governorate, a 100,000 bpd refinery in Wasit (East Iraq), and a 70,000 bpd refinery in Muthanna (South Iraq). The seventh refinery venture is slated to be for a 70,000 bpd refinery within the Western Al Anbar Governorate.
The refinery growth technique comes at a time when Iraq continues to be struggling to stick to its OPEC quotas. State-owned Iraqi oil marketeer SOMO reported that in February 2023, Iraq produced round 4.34 million bpd, a small change from the earlier month, and nonetheless 92,000 bpd beneath official OPEC quota ranges. In January 2023 manufacturing ranges additionally have been round 100,000 bpd beneath OPEC manufacturing quota, whereas December 2022 ranges have been at 4.43 million bpd. The principle underlying cause for the present low manufacturing ranges is the upkeep work going down on the 400,000 bpd West Qurna 2 oil discipline. The shortfall nevertheless contradicts official statements made in January 2023 that different Iraqi oilfields would be capable to compensate for decrease manufacturing at West Qurna 2.
A extra constructive growth this month is the rapprochement between Baghdad and the KRG, which have been at loggerheads about oil revenues from Iraq’s northern oil operations. In line with Iraqi PM Mohammed Shia’ Al Sudani, Baghdad and the KRG authorities have reached an settlement to finish the Baghdad – Erbil dispute over the Kurdistan area’s oil revenues. Al Sudani acknowledged to the press that the Kurdish oil revenues will probably be put in a single account that each the PM and the Kurdistan PM can have management over.
And the stakes in Iraq’s north are huge. Typically dubbed as one of many final oil frontiers, the lifting price for oil stays the bottom on the planet at round U$2-3 per barrel, on a par with that of Saudi Arabia, and reserves are huge.
Genel, a significant companion working within the Kurdish area oil and pure gasoline trade, has reported that year-end 2022 gross 2P reserves at its Tawke license (Genel holds 25% working curiosity) are 327 million barrels. In line with DeGolyer and MacNaughton worldwide petroleum consultants, manufacturing was 39 million bpd in 2022 with an upward technical revision of 9 million barrels.
By implementation and statement of the efficiency of part 1 of the Tawke discipline Enhanced Oil Restoration (EOR) venture, 11.7 MMbbls out of 23.3 MMbbls have been moved from 2C sources into 2P reserves.
In the meantime, at its Taq Taq concession (44% working curiosity, joint operator), gross 2P reserves are 24 million barrels as of end-2022 (26 million barrels at end-2021) after producing 1.6 million barrels in response to McDaniel & Associates unbiased evaluation.
And at its Sarta concession (Genel 30% working curiosity, operator) Genel’s estimate for gross 2P reserves is 9 million barrels on the end-2022 mark (32 million barrels at end-2021) following manufacturing of 1.7 million barrels after analysis of outcomes from appraisal wells and pilot manufacturing.
On the similar time that Iraq is seeking to give its downstream trade a nudge, the UAE’s plan to create a world oil hub at Fujairah appears a lot brighter. The Emirate hub is going through stress because of the elevated inflow of Russian oil volumes, which has resulted in a pressure on obtainable storage and transit choices. European markets have banned Russian oil, and Moscow has redirected its flows to Asia, offering a chance for Fujairah and different Emirati events to take benefit.
VTTI Fujairah Terminals industrial supervisor Maha Abdelmajeed acknowledged on the Gas Oil Discussion board (FUJCON) that the terminal has seen a major inflow of Urals and naphtha, which he expects to final within the close to future. Nevertheless, current tanks are already full, indicating that Fujairah’s storage capability of 1.1 million cubic meters has been reached. Vessel knowledge from 2022 exhibits that Fujairah has obtained round 12,500 vessels, with complete volumes up by roughly 10%. The Port of Fujairah’s BD Supervisor, Martijn Heijboer, expects a wholesome urge for food for brand new transit volumes and storage demand. Moreover, Fujairah is about to fee a dry bulk export facility quickly, which is able to add roughly 18 million tons of mixture dealing with capability in Dibba. By 2050, methanol and LNG are projected to have the highest market share of other bunker fuels at Fujairah, adopted by biofuels and ammonia. With these developments, Fujairah is predicted to be well-positioned to develop into one of many world’s largest bunkering hubs.
By Cyril Widdershoven for Oilprice.com
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Cyril Widdershoven
Dr. Cyril Widdershoven is a long-time observer of the worldwide power market. Presently, he holds a number of advisory positions with worldwide suppose tanks within the Center…
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