Iraq in talks with Halliburton, Saudi Aramco to develop oil, gas in western desert

(Bloomberg) — Iraq is in talks with Halliburton Co. and Saudi Arabia’s Aramco to carry out oil and gas developments in the west of the country.

Baghdad is in discussion with Halliburton Co. for a technical partnership to develop and operate oil and gas reserves in Anbar province near Iraq’s borders with Syria and Saudi Arabia, Iraq’s Oil Minister Ihsan Abdul Jabbar said in an interview in Qatar. The ministry is finalizing the commercial terms and scope of work and Iraq’s government will sign the contract once it takes office, he said.

The cost of the development will be covered by the Iraqi government and possibly Saudi Aramco if the oil giant decides to invest, the minister said. Iraq is also in talks with Aramco to fund and develop the nearby Akkas gas field, said Jabbar. The field has been idle for years due to internal strife before the government recaptured it back from Islamic State militants in late 2017. Korea’s KOGAS, which held a development contract for the field, is no longer involved in the project, said the minister.

Gas from the field would be consumed in Iraq and help the country use less oil to produce electricity, said Jabbar. Natural gas is a cleaner-burning source of fuel for electricity production. Iraq is speaking to Qatar to supply liquefied natural gas until it produces enough gas of its own, Jabbar said.

The Gulf nation, OPEC’s second-largest crude producer, aims to reach self-sufficiency in gas by 2025. The country is working on a plan to develop its vast gas fields with the aim of generating 80 percent of its gas locally, and it will only need to import LNG in the summer months of June, July and August, he said. Demand for air conditioning soars in that period, when temperatures often hit 50 degrees Celsius (122 Fahrenheit).

Iraq draws around 95 percent of its state revenue from oil sales. While consumers complain of the distress that high prices are inflicting, they offered some relief to the economy and boosted its foreign reserves. When oil prices plummeted at the beginning of the pandemic, Baghdad was in preliminary talks with the International Monetary Fund for a possible loan. Investments are still hobbled by years of conflict, terrorism, and insecurity.