ExxonMobil likely to ramp up spending on Iraqi upstream operations

Oil&Gas Materials 17 January 2020 11:47 (UTC +04:00)
ExxonMobil likely to ramp up spending on Iraqi upstream operations

BAKU, Azerbaijan, Jan. 17

By Leman Zeynalova - Trend:

US-based ExxonMobil spent more than $250 million in 2019 on its Iraqi upstream operations, and this number would likely be ramped up by an additional $150 million over the next five years, said Rystad Energy, the independent energy research and consulting firm headquartered in Norway, Trend reports.

Rystad Energy, believes that this is because the company aims to increase production through 2024.

“However, any spending plans in Iraq are likely to be under review given the current circumstances,” said Matthew Fitzsimmons, VP Oilfield Research at Rystad Energy.

He reasons that ExxonMobil could ultimately decide to divert a portion of its Iraqi spending budget to other regions where the company is investing heavily in production growth, such as Guyana’s offshore sector and the US shale industry.

Rystad Energy believes that among the major oil companies in Iraq, BP has emerged as a clear leader.

“Before the recent flaring of tensions, BP had been expected to allocate about 4 percent of its annual $25.6 billion global oil and gas spending budget towards projects in Iraq. The company has managed an ambitious water injection program that is helping to boost its output and make BP the third largest producer in Iraq, but the fate of this program is now uncertain,” said the company.

“Continued tensions in the region could see BP slow their water injection program down, and limit the high-side of production for the company and for other international players in southern Iraq,” Fitzsimmons believes.

Iraqi oil production averaged more than 4.8 million barrels per day (bpd) in 2019, of which about 1.8 million bpd stemmed from the country’s domestic and state-owned players, said Rystad Energy.

“International oil companies were thus responsible for the lion’s share of production – in the region of 3 million bpd. Companies headquartered in China collectively produced more than 1 million bpd, E&Ps from the United Kingdom produced beyond 630,000 bpd, and Russian players had combined average output of around 330,000 bpd,” the company said.

PetroChina and BP had the largest working interest production for overseas companies, at 880,000 and 606,000 bpd, respectively, according to Rystad Energy.

“US-based companies collectively produced about 180,000 bpd on average last year, led by ExxonMobil with nearly 106,000 bpd.”


Follow the author on Twitter: @Lyaman_Zeyn