Chief Engineer / Mouafaq Ya’aqub Yousif

Introduction:
This subject is very important for the country in general and the Ministry of Oil in special. It is very important to achieve the two following aims:

1. Increasing the production from the current fields (Kirkuk field, Alrumaila, Jamboor, Alqayara…etc).
2. Adding new fields by exploring virgin fields, and these are many in Iraq (some are dug and some are not used) and in the two cases the new trends of the oil policy is providing a great protection for the investor through the affirmance of oil policy and form the highest council for the gas and oil related to the supreme oil and gas council.

Below is a summary about the naturist of the oil industry that is related to the investment.

First: refining and refineries:

This activity is divided into two parts:
First part:

Renew the current refineries in order to make them suitable for the requirements of the industrial and social life, and to establish and create small new refineries of about 80 thousand barrel daily for each refinery all over Iraq. The renewing activity is including creating new units and developing the old ones. The executing activity will be through advertising of supplying and installing units or supplying units only. The oil project company is achieving some of the works by contracting with the supplying companies, for example (kwesnjaq refinery). Most of the work will be according to services contracts or through participating in work.

Second part:
Building and creating and constructing new refineries with big capacities more than 80 thousands to 300 thousands barrels daily. These refineries are characterized with the following:

1. The characteristics are from the newest ones in the world.
2. Reduce the using of the chemical materials as boosters in order to get the oil production (Gasoline, casoil, greases…etc.)
3. The products are matched to the required scientific characterizations to protect the environment.
4. They have high safety requirements.

   The building of the refineries will based on contractual basics, and they are two types:
   a- Building and operating and delivering BOT.
   b- Building and operating and seising BOO for the investor.

In the two cases, the investor will completely builds the refinery and operates it for a period of time agreed upon it (for the type a) and this period is about (20-25 year). The Ministry of Oil will provide ore oil with formal prices to the investor through the operation period, and it will divide the products with the investor (according to the agreement form), and the investor will be free with his share (he can export it). But for type b, the refinery will be owned by the investing side, and the ore oil will be provided with the trading prices, and the products will turn back to the investor with the raw material in order to complete the needs of the local markets.

Second (development of the oil fields):

The refineries in Iraq are many and they are distributed in the north, south and in the middle of Iraq. Some of these refineries are used and productive and some are not productive. The nature and type of the development contracts is depending on the following:

1. Is the geologic compositions are explored or not.
2. Dose the geologic compositions have dug wells or not.
3. The dimensions of the geologic compositions.
4. The amount and type of the oil and gas if found.
    Note: when there is gas or oil in the geological compositions, the composition will turn into gas or oil fields.
5. The number of the dug wells in the oil fields that are going to be developed, and if these fields whether they were related to the production and exporting lines or not.
6. The amount of the productive oil from the fields that are related to the production lines.
7. The new aimed production in order to raise the production.
8. The type of the productive oil (light, middle, heavy).

The geologic compositions (which have been determined from the oil explorations company according to the geologic comparison and some of the primitive surveys) need the following before developing them:

• Two and three dimensions’ surveying operations (geological, gravitative, magnetic).
• digging at least five explorations wells.
• Comprehensive study for the gained information from the surveying and digging.

Note: these compositions are given sometimes according to the (risky contract), and there will be a contract when the gas and oil are available.

1. Magnoon field                      productive not developed.
2. West Qurna field                  productive not developed.
3. Omar river field                   productive not developed.
4. Hilfaya field                         productive not developed.
5. Nasiriya field                       productive, not related, not developed.
6. Alrafedain field                   productive, not related, not developed.
7. Balad field                           productive, not related, not developed. (Heavy oil).

1. Algharaf field.
2. Almansooriya field.
3. Qara Choq field.
4. Alemara field.
5. Alrifayee field.
6. Alahdab field.
7. Elan field.
8. Quba Khormala field.
9. Chamchal field.

And others…..

Basic landmarks of the development
After signing the primary contract of the development… the executive and investing company will do the following:

1. Re-evaluate all the provided information from the beneficiary side (Ministry of Oil), and it includes handling the information and getting the basic components to put the development plan( the oil storage, type and densities of the oil, the full and partial production average, the productive layer and its numbers….etc.).
2. according to the above results (if all the information were available), there will be a development plan and it includes:
   • Number of the dug wells and their types and the way of digging.
   • The locations of the wells in the field.
   • The number of the oil layers that are selected to the production.
   • The primary average production and the permanent.
   • The type of the productive oil and their percentages in the entire production.
   • Station for isolating gas (Satellites) and distribute them on the field.
   • The center station for processing (CPS), its numbers and locations.
   • The extraction system for the productive oil.
   • The extraction system of the coupling gases.
   • The details of the production beginning and the way of acclivous (plateau).
   • All the completing establishments (the electrical civilian works, systems, needed oil, housing, etc).
3. The contractor will arrange financial schedules for all the (Opex and Capex) costs throughout the years of the contract and for all activities (Cash Flow analysis).

Type of the contracts (PSA)

• All the contracts of the virgin fields (productive, not related, not developed) will be on the basics of the participating in the production, the nature of the participation will depend on the oil field’s size and the type of the oil and the extracting average. And the same thing is implemented on the huge and middle fields.
• The contracts may be divided to:
  1. Contract of digging oil field.
  2. Contract of joining wells.
  3. Contract of creating superficial establishments.
  4. Contract of extraction system.

The contracts that have been mentioned above are named (service contracts) and they are financed directly from the beneficiary side according to the nature of the contract. And it can formed shared group of work on one of the fields. This group is including digging Wells Company and creating superficial establishments’ company and general companies under one financial administration.

The way of taking back the costs of the investor:

1. The participating in the production concept is depending on the profit oil or the net amount of the production after deducting the cost oil.
2. The contractor will take back the actual cost from the cost oil with the trading price, and with the maximum percentage (40-50 %) from the entire production of the field, starting form the primary production date.
3. The oil percentage will be agreed upon it, which is given to the contractor according to the expected economies of the project.

1. The contractor will take back his expenses and profits quickly if he achieved his commitment and shortened the time in order to increase the production, and then he will start taking his percentage from the profit of the production throughout the years of the contract.
2. The period of the contract can be extended according to the agreement.

The way of starting of the development of the oil fields:

1. Preparing a specialized oil company in the development field and it is better to be famous or has a good reputation.
2. The oil company or any one who united with it will present a message to the Ministry of Oil showing its will to get in the development field.
3. The Ministry of Oil will limit the suitable field of the company after reviewing the technical and financial abilities of the oil company.
4. The company will be invited formally for discussing.
5. Then a steering committee will be formed between the company and the Ministry of Oil to hold many meetings in order to sign the memoranda.
6. The Ministry of Oil will present all the basic and general information about the field to the company.
7. The company will study this information and handle them in order to find a primary form to develop the field.
8. The specified field can not be given to another company in the same time.
9. The participated memoranda will not oblige the Ministry of Oil to transform the field to the company after declaring it formally.
10. The preference will be for the company because of the getting information and the qualifying of the offer that are presented from them (because it is complete offer technically and economically) and in short period less than the others.