Iraq Remains Biggest Petroleum Opportunity, Petrel Resources Says -- Commodity Comment

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Iraq Remains Biggest Petroleum Opportunity, Petrel Resources Says -- Commodity Comment

Published: Sept. 22, 2021 at 4:43 a.m. ET

 

 

By Jaime Llinares Taboada

Iraq remains the biggest petroleum opportunity today, Petrel Resources says. The London-listed company, which last year submitted a proposal to develop an oil field in Iraq, says the biggest challenge in the country is outdated contracts and fiscal terms. Here's what Petrel had to say as it reported first half accounts:

On Iraq's oil market:

"Despite much-publicized challenges, Iraq remains the biggest commercial opportunity in petroleum today. The geology is unsurpassed. The oil market is sharply recovering. But contracts must be updated for effective exploration and development."

"2021 was a moment of truth for companies prepared to invest in Iraq. Some western majors, ignorant of prevailing circumstances, had bid over-optimistically on service contracts from 2009, and then found it hard to operate effectively."

"Others, including TotalEnergies and Chinese NOCs, have re-committed themselves given the large opportunity. Iraq is not for the faint of heart, but there is considerable upside to be realized provided the elected government implements necessary reforms."

"For several years after the 2003 Iraqi invasion, there was a perception that contractors close to western governments, and later super-majors, would dominate Iraqi oil exploration and development. Iraqis had other ideas, however: they want partners, rather than bosses."

"The biggest challenge facing Petrel in this new era is not operating conditions, access to technology or community relations. The biggest challenge facing agile industry players is outdated contracts and fiscal terms that were designed during boom years."

On Petrel's operations in Iraq:

"Petrel has also been asked, by an Iraqi group, to evaluate minerals opportunities that may become economically and legally viable following the expected passage of legislation."

 

"At the invitation of Iraqi government officials in 2020, Petrel submitted a proposal to develop the Merjan oil field, in accordance with applicable laws and the Iraqi Model Contract. This builds on the Technical Cooperation Agreement (TCA), conducted by Petrel in 50% cooperation with partner Itochu, from 2004."

 

https://www.marketwatch.com/story/iraq-remains-biggest-petroleum-opportunity-petrel-resources-says-commodity-comment-271632300220