MEOG: Saudi uptick and Iraqi drilling

In MEOG this week we look at Saudi output data and more drilling by Iraq’s IDC.

Data formally confirmed this week that Saudi Arabia’s oil production increase by 110,000 barrels per day (bpd) during December, in line with its OPEC+ quota.

Figures provided by Riyadh to the Joint Organizations Data Initiative (JODI) showed that oil output averaged 10.018mn bpd, while exports fell marginally to 6.937mn bpd.

The production figure is slightly higher than had been anticipated by previous surveys and paints a clear picture of the benefits of the OPEC+ agreement which Gulf oil leaders have this week rallied behind. In December 2020, Saudi oil production sat at 8.98mn bpd and the uptick in output has come alongside a massive increase in realised oil prices. With crude now sitting comfortably in the $90-100 per barrel range, the US government and the International Energy Agency (IEA) have been the most vocal voices calling for OPEC’s top producers – Saudi, the UAE and Iraq – to utilise their spare capacity to bring greater balance and stability to the market.

Meanwhile, the state-owned Iraqi Drilling Co. (IDC) this week reported that it had begun drilling the first of a 43-well drilling campaign at the supergiant Majnoon oilfield as the field’s operator looks to ramp up output.

A statement from the Ministry of Oil (MoO) seen by NewsBase said that IDC’s technical and engineering staff had begun drilling the MJ-129 well on behalf of Iraqi National Oil Co. (INOC) subsidiary Basra Oil Co. (BOC) in the southern Basra Governorate.

IDC director-general Basem Abdul Karim was quoted as saying that the work followed completion of “all the necessary preparations for preparing and operating the drilling rig equipment”. He said that the well would be drilled to a total depth of 3,648 metres using the IDC 56 drilling rig to target the productive Mishrif formation.

The start of drilling follows the announcement in December by Oil Minister Ihsan Abdul Jabbar of a production capacity target of 450,000 bpd, up from the current 240,000 bpd.