MEOG: Faihaa expansion begins

In this week’s MEOG we look at the expansion plans for one of the forgotten oilfields in Iraq’s south-east and a pipeline tender in Kuwait.

The operators of south-eastern Iraq’s Faihaa oilfield this week awarded a contract to two Chinese firms for the construction of a facility to process crude oil from the asset as the developers move ahead with the field’s expansion.

During a ceremony to award the contract for the plant, Ihsan Abdul Jabbar, Oil Minister and president of the Iraqi National Oil Co. (INOC), emphasised both the company and the ministry’s “keenness to implement its plans to implement projects to develop” exploration areas as the country seeks to ramp up oil production. He noted that Faihaa, located in Block 9, is one of such developments, adding that the field’s expansion phase aims to increase output to 100,000 barrels per day (bpd) of light crude and another 135 barrels of oil equivalent (boe) of gas, with the latter to feed power plants for electricity production.

Faihaa was discovered by Kuwait Energy Co. (KEC, 70%) and Dubai-based Dragon Oil (30%) at the Faihaa-1 well in 2014. KEC has since been acquired by China’s United Energy Group (UEG), with Dragon now part of the Emirates National Oil Co. (ENOC).

The firms secured the development contract for the site in May 2012, during the fourth round of bidding for a range of sites with combined proven reserves of more than 60bn barrels.

Meanwhile, state-owned Kuwait Oil Co. (KOC) will soon launch a pipeline construction contract to support its Jurassic gas production facilities following the award of two major deals in Q4 2021.

According to reports in local media, the $100mn contract is expected to be made available to bidders through the government’s Central Agency for Public Tenders (CAPT) later this year and will be linked to JPF-4 and JPF-5.

The main contracts for the two processing facilities were awarded in November, to Chinese company Jereh Oil & Gas Engineering Corp. and local firm Spetco International Petroleum Co. respectively. According to sources close to the awards quoted in the local Arabic-language Al-Anba, Jereh’s winning bid was valued at $426mn, while Spetco’s was $398.2mn, both around 14-20% below the level anticipated when bids were sought in Q3.