Iraq kicks off drilling at Akkas following contract overhaul

Iraq has commenced well-drilling operations at the Akkas gas field in Anbar Governorate, a critical move in the state’s strategy to curb reliance on energy imports and bolster domestic power generation.

In a statement received by IraqiNews, the Ministry of Oil confirmed that the first phase of early production has officially begun with an initial capacity of 100mn cubic feet per day (mmcfd). The ministry outlined plans to gradually ramp up output to 400mmcfd. The project is being implemented in cooperation with the US oilfield services group Schlumberger, marking a definitive shift in the field’s troubled development history.

The gas produced is earmarked for the Anbar Combined Cycle Power Plant and the Akkas Power Plant, infrastructure vital for stabilising the electricity grid in western Iraq. The ministry described Akkas as one of the country’s largest gas assets, estimated to hold total resources of 5.6 trillion cubic feet. Developing the field aligns with Baghdad’s broader objective to cut the fuel import bill and position gas as a cornerstone of the national energy mix.

The operational progress follows a contentious reshuffling of commercial partners. In April last year, the Iraqi government cancelled a contract with the Ukrainian firm Ukrzemresurs. Iraq Oil Report quoted a sector source stating that the contract was officially terminated at the end of March.

The cancellation has raised the spectre of legal recourse. Al-Sumaria News reported on April 27 that the move could expose the state to international arbitration. Ukrzemresurs has labelled the decision unlawful and threatened to pursue damages. Friction reportedly arose over a requirement for a $50mn performance guarantee and the ministry’s decision to invite Schlumberger directly to undertake drilling, bypassing the competitive tender process the Ukrainian company had anticipated.

The Akkas field, located around 30km from the Syrian border, has faced years of stagnation. A technical services contract awarded to a consortium led by Korea Gas Corp. (Kogas) in 2010 was derailed by security instability, specifically the occupation of the Anbar province by Islamic State forces until late 2017.

With the Ukrzemresurs deal now void, the ministry has returned to the drawing board, engaging Schlumberger to accelerate development. The Undersecretary for Extraction Affairs, Bassem Mohammed Khudair, announced the launch on behalf of the Deputy Prime Minister for Energy Affairs, signalling high-level political support for finally bringing the asset on stream.