MEOG: ADNOC deal and Iraqi impasse

As oil exporters around the Middle East ride high on bullish prices, attention has returned to deal-making.

Last week, Abu Dhabi National Oil Co. (ADNOC) continued its recent spate of strategic tie-ups with Asian companies, finalising a broad agreement with Malaysian counterpart Petronas. The Emirati firm said that they would explore opportunities throughout the oil and gas value chain, focusing on conventional and unconventional resources in the upstream as well as assessing potential fuel and petrochemicals projects in the downstream.

The move follows recent upstream deals with Japan’s Cosmo and Thailand’s PTT E&P as well as hydrogen-focused agreements with South Korea’s GS Energy and Japan’s Ministry of Economy, Trade and Industry (METI).

In Iraq, a vote is expected this week on the draft 2021 budget agreed in December between Baghdad and Erbil. Despite the Kurdistan Regional Government (KRG) having agreed on the draft and the region’s deputy PM saying it was “ready to implement” the deal, it is yet to send the state oil marketer SOMO a single barrel of oil, according to Baghdad. Meanwhile, the Iraqi cabinet is also still in the process of negotiating contracts apportioned during the 2018 licensing round, the Federal Oil and Gas Law (FOGL) and a proposed amendment to the INOC law.

In the Eastern Med, the partners developing the Leviathan gas field anticipate that 2021 sales will be around 1.1bn cubic metres higher than their previous July 2020 estimate. Production began in late 2019 and has been ramping up to its predicted plateau level of 1.2bn cubic feet (34mn cubic metres) per day.