MEOG: Iraqi drilling and Saudi contracts

In this week’s MEOG, we look at Iraq’s continued drilling efforts and major awards for Saudi oilfield work.

The state-owned Iraqi Drilling Co. (IDC) has maintained momentum from 2021 into the New Year, completing work on a well in the north of the country and kicking off a new well in the south-east. The drilling push comes as Baghdad seeks to achieve a 3mn barrel per day oil production increase to 8mn bpd by 2027.

The Ministry of Oil (MoO) announced last week that IDC had completed the first of 10 well reclamation jobs at the Khabbaz oilfield in the northern Kirkuk Governorate on behalf of the state-owned North Oil Co (NOC), a subsidiary of the newly reformed Iraq National Oil Co. (INOC).

In a statement published by the MoO, IDC’s director-general Basem Abdul Karim Nasser said that operations at Khabbaz 39 had included “lowering the subsurface control valves to restart the well and preserve it from sabotage and terrorist operations”. He noted that the IDC 206 rig had been used, adding that another unit would be mobilised to the field in order to speed up work to complete the remaining wells.

Meanwhile, Saudi Aramco last week awarded five major engineering, procurement and construction (EPC) contracts worth more than $4.5bn for work on the Zuluf crude increment programme. The project is expected to add 600,000 bpd of Arabian Heavy capacity to Zuluf’s existing maximum sustainable capacity (MSC) of 825,000 bpd by 2026.

Though only the UAE’s National Petroleum Construction Co. (NPCC) has publicly acknowledged the award of two packages – in a statement to the Abu Dhabi Securities Exchange (ADX) – Middle East Oil & Gas (MEOG) understands that American firm McDermott and a consortium of India’s Larsen & Toubro and Oslo-listed Subsea 7 also picked up work.

NPCC’s three-year, $2.23bn deal for packages four and five covers wellhead topsides, tie-in platforms, an electrical distribution platform and associated pipelines and cabling.

Meanwhile, sources at the contractor companies told several industry publications that the first package – covering 42-inch (1,067-mm) oil trunklines – was awarded to McDermott, with L&T and Subsea 7 winning packages two and three, which cover water injection wellhead topsides, three water injection tie-in platforms and their associated pipes and cabling.