Iraq’s oil ministry has formalised an agreement with China’s Geo-Jade Petroleum and Basra Crescent, a local firm, to augment the Tuba oil field’s capacity and develop a comprehensive set of downstream and power assets.
This pact is reflective of Iraq’s strategy to engage international partners in integrated energy projects.
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At the signing ceremony in Baghdad on 21 May, Oil Minister Hayan Abdulghani announced the South Basrah Integrated Energy Project’s ambition to increase Tuba’s production capacity from 20,000bpd to 100,000bpd.
The initiative will also involve processing up to 50 million cubic feet per day of associated gas.
The downstream elements of the project encompass a 200,000bpd refinery, a 620,000 tonnes per year (t/yr) petrochemical plant, and a 520,000 t/yr fertiliser facility.
Additionally, the energy infrastructure will be bolstered by a 650MW thermal power plant and a 400MW solar plant, as detailed by Abdulghani.
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By GlobalDataGeo-Jade Petroleum is set to channel approximately $848m into the South Basra integrated project, as per reports from Reuters.
This agreement signifies Geo-Jade’s successful bids in the nation’s fifth and sixth licensing rounds.
Despite holding several upstream assets in Iraq, Geo-Jade has yet to commence production on any.
This deal comes on the heels of a similar multi-billion-dollar contract with TotalEnergies in 2023, which amalgamated gas processing, water treatment, and solar power with the Ratawi field’s development.
In February, BP solidified terms with the Government of Iraq to invest in the redevelopment of major oilfields in Kirkuk, spanning oil, gas, power, and water sectors, with prospects for additional exploration.
Also, the Kurdistan Government’s recent energy agreements with US firms HKN Energy and WesternZagros, valued at $110bn over their lifetime, have been declared “null and void” by Iraq’s Oil Ministry.
This development exacerbates the longstanding contention over regional resource governance and the ongoing tensions between Iraq and the semi-autonomous Kurdistan region.
