Iraq’s Khor Mor gas field, the country’s largest non-associated gas field, will increase production by 50% to 750 million standard cubic feet per day (MMscf/d) after the field’s key stakeholders, Crescent Petroleum and Dana Gas, delivered the KM250 project eight months ahead of schedule. KM250 will also produce 7,000 barrels of condensate per day and 460 tonnes per day of LPG, complementing current production of 15,200 bbl/d of condensate and 1,070 t/d of LPG.
Located in the Kurdistan Region of Iraq (KRI), the project will boost power generation and industrial growth across the KRI, supporting the Kurdistan Regional Government’s initiative to supply 24-hour electricity, while boosting power supply to other regions of Iraq. The $1.1 billion project was listed on the Nordic Alternative Bond Market and was backed by financing from the US Development Finance Corporation (DFC) and Bank of Sharjah, as well as proceeds from Pearl Petroleum’s $350 million senior secured bonds. Crescent Petroleum and Dana Gas each own a 35% stake in the Khor Mor gas field.
“The delivery of KM250 ahead of schedule marks a significant achievement for Crescent Petroleum, Dana Gas and our Pearl Consortium partners. This achievement highlights our continued dedication to the Kurdistan Region of Iraq, demonstrates our ability to unlock its vast energy resources and reinforces our commitment to creating jobs, improving local services and providing cleaner, more reliable energy for the region and the country”. said Majid Jafar, CEO of Crescent Petroleum.
The Iraqi energy sector is currently undergoing a renaissance. The Kurdistan Region has exported ~2.5 million barrels of crude oil since flows resumed on September 27, two and a half years since they were suspended. Exports were halted in early 2023 after the International Chamber of Commerce (ICC) ruled that Türkiye had violated a 1973 treaty by purchasing Kurdish crude without Iraq’s consent. Meanwhile, the French oil and gas multinational, Total Energies (NYSE:TTE), has initiated the Gas Growth Integrated Project (GGIP), a $27 billion multi-energy initiative in Iraq, after reaching an agreement with the Iraqi government in 2024 to start the long-delayed energy project.
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The project includes several components, including the development of the Ratawi oil field, the construction of a 1 GW solar park and the construction of a seawater treatment plant. The first phase of the oil project targets production of 120,000 b/d by early 2026, while the solar component is expected to begin supplying power in late 2025.
Total first signed a deal with the Iraqi government in 2021 that would see the company build four oil, gas and renewable energy projects in southern Iraq over 25 years with an initial investment of $10 billion. Unfortunately, the mammoth project was shelved amid disputes and squabbles among Iraqi politicians over the terms of the deal. However, Iraq ultimately agreed to a smaller 30% stake in the project, setting in motion a deal that could attract foreign investment back to the country. After years of instability, Iraq has been enjoying a period of relative stability, increasing the chances of foreign investors returning to the country.
“The Iraqi government confirmed the entire contract, without any modifications… so to me that was more than good news.” Total CEO Patrick Pouyane told Reuters.
Meanwhile, the British oil and gas giant BP Plc. (NYSE:BP) will begin development of the Kirkuk oil and gas fields in Iraq after finalizing a contract in March 2025. According to Iraqi officials, the Kirkuk oil fields are currently producing 245,000 barrels of crude oil per day. The Kirkuk field is one of the largest onshore oil fields in the world, discovered in 1927, with an estimated recoverable oil of 10 billion barrels. It is operated by North Oil Company. Iraq is OPEC’s second largest producer after Saudi Arabia. The Iraqi economy relies heavily on crude oil exports, with crude oil accounting for more than 90 percent of the country’s income.
Oil prices have come under pressure, falling to a five-month low after US President Donald Trump escalated trade tensions between the US and China, while the International Energy Agency (IEA) has forecast a supply surplus in 2026. However, commodities analysts at Standard Chartered see the excessively bearish sentiment as largely unwarranted, saying Compensatory production cuts by Iraq and Kazakhstan will be sufficient to offset ongoing cuts. OPEC+ program.
Markets reacted largely positively after the eight producers that make up OPEC+ met virtually on October 5 and, with little fanfare, announced that 137 KB/d more barrels would be added to the market in November. As expected, OPEC+ outlined proposed compensation cuts for overproduced volumes by six members, led by Iraq, which proposed an immediate adjustment of 130 kb/d from August 2025 to January 2026, before tapering to 122 kb/d in June 2026. Commodities analysts at Standard Chartered have noted that Iraq will do most of the heavy lifting in the latest round of OPEC+ reductions, with the country’s cuts alone almost enough to neutralize the increase in the rest of the members.
By Alex Kimani for Oilprice.com
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