Baker Hughes, GE sign deal with Iraq to process natural gas
Staff Writer |
Baker Hughes and General Electric (GE) signed a contract with the federal government of Iraq on Monday to process natural gas alongside crude oil at two fields in southern Iraq, the country’s Oil Ministry said.
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GE first announced the plan in July, and it is part of the Iraqi government’s greater efforts to stop 'flaring,' or simply burning off and wasting gas during oil extraction in the fields.
Though more gas is currently collected and utilized in gas-dedicated fields than in previous years, gas from oil fields continues to be flared, as Iraq lacks proper facilities and infrastructure to process it into fuel for local consumption or exports.
According to the World Bank, the cost of the gas flaring in Iraq amounts to about $2.5 billion in annual lost revenue and that, if efficiently processed, it would fulfill a large portion of domestic gas-based power generation.
Iraq’s contract with Baker Hughes and GE would provide gas extraction services at the oil fields of al-Gharraf and Nassiriya, the second contract signed by Baghdad to process gas associated with oil, following the US energy company Orion's Jan. 2018 contract.
The associated gas production is expected to grow as the country boosts its oil output capacity.
The Iraqi government on Sunday approved a plan to increase the country’s oil production from 4.4 million barrels per day now to 6.5 million bpd by 2022.
Iraq, OPEC’s second-largest oil producer following Saudi Arabia, plans to award oil and gas exploration and development contracts in 11 new blocs on April 15.
International oil companies have complained that there won't be sufficient time to analyze a new contract model that is planned to be announced just two days earlier, potentially holding up bids by the companies.
Over 95 percent of Iraq’s income comes from oil and gas sales. ■
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