Iraq’s North Oil resumes production from Kirkuk wells

Iraq’s North Oil Co. (NOC) has recommenced production from 35 wells in the Kirkuk region as part of a strategic effort to bolster output, according to a report by Shafaq News. Over the weekend, Amer Khalil Ahmed, the director general of NOC, conducted inspections at the Sarlu and Sarbashakh stations, integral components of the Kirkuk oilfield, to evaluate production operations and discuss the company’s plans for increasing output.

Teams of engineers and technical experts have successfully reactivated 17 wells in the Bai Hassan oilfield, seven in the Kirkuk field and one in the Jambur field. These wells had been dormant for an extended period. Additionally, the teams have resumed production from Kirkuk Well 361 and performed perforations at Kirkuk Well 344 in Sarbashakh, with further assessments ongoing for other wells in the vicinity.

NOC plans to intensify operations this week, focusing on Kirkuk Wells 234, 329, 328, 327 and 341 within the Sarlu and Sarbashakh stations, as well as Bai Hassan Wells 49, 161, 164 and 184 in the Kathka and Dawood Karka areas, and Kirkuk Well 257 in the Shoraw area.

Current production levels stand at approximately 330,000 barrels per day, predominantly allocated for refining, with around 10,000 bpd being exported to Jordan.

In January, NOC launched ambitious field development projects aimed at enhancing production in the Kirkuk fields, successfully restoring 20 wells in the Jambur field, which had been non-operational for numerous years, resulting in an additional output of approximately 10,000 bpd.

Shafaq News reports that the company aims to continue bolstering its production capabilities amidst a challenging backdrop of political and operational hurdles.

The news follows the Iraqi government’s approval of budgetary amendments that pave the way for the resumption of oil exports from the semi-autonomous Kurdistan Region.

The decision follows the approval of a critical amendment to the federal budget, potentially easing the long-standing fiscal tensions between Baghdad and Erbil.

Deputy Speaker Shakhawan Abdullah told Shafaq News on February 2: “The obstacles to oil exports from the Kurdistan Region have been resolved.” He said that the amendment aims to ensure the timely payment of public sector salaries in the region. The legislative move marks a pivotal step in restoring the flow of crude oil, which had been suspended since March 2023.

The suspension came after Turkey halted the export of Iraqi crude, including oil from Kurdistan, through the Kirkuk-Ceyhan pipeline. The cessation followed an arbitration ruling by the International Chamber of Commerce (ICC), which mandated that Turkey pay $1.5bn in damages to Baghdad for unauthorised oil exports conducted by the Kurdistan Regional Government (KRG) between 2014 and 2018. Turkey has contested the ruling, insisting that Iraq must compensate for various infractions.

Meanwhile, Reuters reported on February 4 that bp is expected to invest up to $25bn in redeveloping four Kirkuk oilfields – the Baba and Avanah domes and the adjacent Bai Hassan, Jambur and Khabbaz fields – which are operated by NOC.

Kirkuk is rich in oil reserves but crude operations were affected by political disputes between Baghdad and the KRG.

The potential profit-sharing agreement will see bp investing between $20bn and $25bn under a profit-sharing agreement (PSA) lasting more than 25 years. The official expects the deal to be signed in the coming weeks.