Iraq to award 30 new oil and gas projects in latest licensing rounds

Deadline for international oil companies to send a formal letter of intent is January 2024

Flare stacks burning off excess gas at the Nahr Bin Omar oilfield in Iraq's southern province of Basra. AFP

Iraq, Opec's second-largest producer, will award 30 new oil and gas projects in its "fifth +" and sixth licensing rounds.

The fifth + comprises 16 new projects, some of which were not awarded in the fifth licensing round, an Iraqi oil ministry official said during a press conference at Adipec on Tuesday.

The sixth licensing round will include 14 projects, he said, adding that the deadline for international oil companies to send a formal letter of intent was January 2024.

Encouraged by an improved security situation, Iraq in 2009 began to attract international oil companies to help develop its resources.

Since then, the nation has awarded dozens of oil deals to develop major fields that hold more than half of its 145.02 billion barrels of proven reserves. Contracts to tap natural gas resources have also been awarded.

Major oil companies operating in the Arab country include Exxon Mobil, Royal Dutch Shell, BP, China’s CNPC and Russia’s Lukoil.

In July, Iraq signed a $27 billion agreement with France’s TotalEnergies to develop oil and gas resources to improve the country’s electricity supply in the biggest single foreign investment in the nation.

Iraq's northern oil export route through Turkey will begin operations this week, Turkey's Energy Minister Alpaslan Bayraktar said on Monday during a panel session at Adipec.

In late March, Turkey halted the flow of oil produced in the region after an arbitration court ruled in favour of Baghdad, saying Ankara had breached a 1973 agreement when it allowed Iraqi-Kurdish authorities to pump without Baghdad's consent.

Iraq's development of its oil and gas reserves comes amid a situation of chronic underinvestment in the broader sector, which has added to crude market volatility.

Oil and gas upstream capital expenditure rose by 39 per cent to $499 billion last year, the highest level since 2014, the International Energy Forum said.

However, annual upstream spending needs to increase to $640 billion by 2030 to ensure adequate supplies, the IEF has said.

The oil and gas industry will require $14 trillion, or $600 billion a year, in investment from now until 2045 to ensure energy security, according to Opec.