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Iraq Seeking Optimal Investments in Oil, Gas

A handout picture provided by the Iranian presidency shows Iraq's Prime Minister Mohammed Shia Al-Sudani addressing a joint press conference with the Iranian president after their meeting in Tehran on November 6, 2023. (Photo by Iranian Presidency / AFP)
A handout picture provided by the Iranian presidency shows Iraq's Prime Minister Mohammed Shia Al-Sudani addressing a joint press conference with the Iranian president after their meeting in Tehran on November 6, 2023. (Photo by Iranian Presidency / AFP)
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Iraq Seeking Optimal Investments in Oil, Gas

A handout picture provided by the Iranian presidency shows Iraq's Prime Minister Mohammed Shia Al-Sudani addressing a joint press conference with the Iranian president after their meeting in Tehran on November 6, 2023. (Photo by Iranian Presidency / AFP)
A handout picture provided by the Iranian presidency shows Iraq's Prime Minister Mohammed Shia Al-Sudani addressing a joint press conference with the Iranian president after their meeting in Tehran on November 6, 2023. (Photo by Iranian Presidency / AFP)

Iraqi Prime Minister Mohammad Shia Al-Sudani stressed on Sunday the importance of utilizing crude oil prices in the global market in increasing financial allocations through optimal oil and gas investments.

During a meeting with Oil Ministry officials, Sudani underscored the need to advance the vital oil sector in all its aspects due to its importance to the state’s development.

Oil represents the primary source of income for Iraq, he remarked, adding that the government is working to develop the sector, as well as the chemical, petrochemical, and fertilizer industries and the electricity sector.

According to a statement by the Iraqi government, Sudani was briefed on the discussions between the Ministry of Oil and the Ministry of Natural Resources in the Kurdistan Regional Government (KRG) to complete the procedures required to resume crude oil exports through the Turkish port of Ceyhan.

He reviewed the implementation of the Ministry’s plans to develop the oil sector in Iraq and projects related to oil and gas extraction, refineries, and exports.

The meeting also tackled investment opportunities announced by the Oil Ministry in 2023.

Meanwhile, a prominent Iraqi official said on Sunday that Iraq has made great strides to expand investment in the gas sector and stop burning operations.

Speaking at the Gas Investment Conference, South Gas Company Director General Hamza Abdul-Baqi Nassir said Iraq is investing in gas from oil fields to meet domestic consumption demands and is considering exporting the surplus to global markets.

The Ministry of Oil has made great efforts to activate licensing contracts with foreign companies to reach a production of 1,000 million standard cubic feet to secure the requirements for energy production and stop gas-burning operations to reduce environmental risks.

Iraq is working to establish a company to absorb all the gases produced, aside from cooperation with the French company Total, he said, adding that it would push towards boosting the capabilities of oil fields and developing alternative energy programs.

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BP Nears Deals for Oil Fields, Curbs on Gas Flaring in Iraq

British Prime Minster Keir Starmer (L) welcomes Prime Minister of Iraq Mohammed Shia al-Sudani to 10 Downing Street in London, Britain, 14 January 2025. (EPA)
British Prime Minster Keir Starmer (L) welcomes Prime Minister of Iraq Mohammed Shia al-Sudani to 10 Downing Street in London, Britain, 14 January 2025. (EPA)
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BP Nears Deals for Oil Fields, Curbs on Gas Flaring in Iraq

British Prime Minster Keir Starmer (L) welcomes Prime Minister of Iraq Mohammed Shia al-Sudani to 10 Downing Street in London, Britain, 14 January 2025. (EPA)
British Prime Minster Keir Starmer (L) welcomes Prime Minister of Iraq Mohammed Shia al-Sudani to 10 Downing Street in London, Britain, 14 January 2025. (EPA)

Iraq and British oil giant BP are set to finalize a deal by early February to develop four oil fields in Kirkuk and curb gas flaring, Iraqi authorities announced Wednesday.

The mega-project in northern Iraq will include plans to recover flared gas to boost the country's electricity production, they said.

Gas flaring refers to the polluting practice of burning off excess gas during oil drilling. It is cheaper than capturing the associated gas.

The Iraqi government and BP signed a new memorandum of understanding in London late Tuesday, as Prime Minister Mohammed Shia al-Sudani and other senior ministers visit Britain to seal various trade and investment deals.

"The objective is to enhance production and achieve optimal targeted rates of oil and gas output," Sudani's office said in a statement.

Iraq's Oil Minister Hayan Abdel Ghani told AFP after the new accord was signed that the project would increase the four oil fields' production to up to 500,000 barrels per day from about 350,000 bpd.

"The agreement commits both parties to sign a contract in the first week of February," he said.

Ghani noted the project will also target gas flaring.

Iraq has the third highest global rate of gas flaring, after Russia and Iran, having flared about 18 billion cubic meters of gas in 2023, according to the World Bank.

The Iraqi government has made eliminating the practice one of its priorities, with plans to curb 80 percent of flared gas by 2026 and to eliminate releases by 2028.

"It's not just a question of investing and increasing oil production... but also gas exploitation. We can no longer tolerate gas flaring, whatever the quantity," Ghani added.

"We need this gas, which Iraq currently imports from neighboring Iran. The government is making serious efforts to put an end to these imports."

Iraq is ultra-dependent on Iranian gas, which covers almost a third of Iraq's energy needs.

However, Teheran regularly cuts off its supply, exacerbating the power shortages that punctuate the daily lives of 45 million Iraqis.

BP is one of the biggest foreign players in Iraq's oil sector, with a history of producing oil in the country dating back to the 1920s when it was still under British mandate.

According to the World Bank, Iraq has 145 billion barrels of proven oil reserves -- among the largest in the world -- amounting to 96 years' worth of production at the current rate.