Home / Iraq drilling expenditure to grow 15% in 2012-2016
Iraq drilling expenditure to grow 15% in 2012-2016by Arabian Oil & Gas Staff on Jan 23, 2013
Douglas-Westwood has released a study into the Iraq and Kurdistan Drilling and Oilfield Services market 2012 – 2016.
In the constrained scenario, oil production increases to 5mmbpd by 2016 in Iraq and 1mmbpd in the Kurdistan region. In this scenario, 1,500 wells will be required to be drilled by 2016 with limited drilling capability.
The report also found that even in its constrained scenario, drilling expenditure is forecast to grow at a rate of 15% in Iraq from 2012-2016. In order to unlock this potential, significant investment will be required to train personnel, upgrade infrastructure and develop the local supply chain in specific areas such as casing and mud services.
Isla Parsons, the report’s co-author said, “Expanding production in the aging super-giant fields in southern Iraq has been the main priority of the Federal Government. As well as projects offering the scale attractive to the IOCs, lifting costs are some of the lowest in the world. However, contract terms and difficult operating conditions have tended to limit the return on investment so far. The national oil & gas infrastructure also remains in poor condition, with massive investment necessary in pipelines, export facilities, water and power supplies.”
The report found that in the north of the country, the semi-autonomous region of Kurdistan is attracting interest. While production accounts for less than 5% of total Iraqi production, reserves are significant. Kurdistan’s terms of business have been purposefully designed to attract risk-taking exploration companies, with 50 operators already active in the region.
In southern Iraq, the largest international service companies are undertaking large integrated projects for the oil majors. The Kurdistan region is serviced by a wider variety of companies including regional players, as well as the large service companies, which are gradually moving into the region.
The report takes a scenario-based approach to the market with a high growth scenario linked to the ambitious aims of the Iraqi government, and a second, more constrained scenario defined by supply chain limitations infrastructure bottlenecks and other factors. Market forecasts have been segmented by drilling services area, field, and operators.
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