Sinopec Pulled Out of Mansouriya Gas Project in Iraq
Chinese Sinopec has withdrawn from the Mansuriya gas field in Iraq, a representative of the Iraqi Ministry of Oil said at the presentation of blocks of new licensing rounds, writes Energy Intelligence.
The Chinese company won the contract to develop the project with reserves of 4.5 trillion cubic feet in 2021.
However, in early 2023, Sinopec asked for changes to the contract terms agreed with the previous government because the reserve estimate provided to the company turned out to be too optimistic, and development without renegotiation would become unprofitable. In particular, Sinopec requested changes to the Mansuriya project regarding production levels and economic model.
Iraqi officials said under ADIPEC that they are in talks with various companies to replace Sinopec in Mansuriya and develop the Akkas gas field (5.6 trillion cubic feet) under the control of a Korean group.
Mansouriya is located in Diyala province, northeast of Baghdad, near the border with Iran. In 2011, the tender to develop the field was won by a consortium led by the Turkish state-owned company Turkish Petroleum Corp., which also included Kuwait Energy PLC and Korean Gas Corp.
Commercial production was expected to begin in 2015. Work was stopped with the invasion of the Islamic State (a terrorist organization banned in Russia) in June 2014. The rebels never fully captured the field, although they temporarily took control of at least two wells, the agency notes.
The consortium declared force majeure, which prevented the contract from being completed, but by mid-2017 it was negotiating terms as the terrorists were driven out of the area. Even after repeated government requests to resume development and assurances of safety, the Turkish Petroleum-led consortium resisted and, despite a 20-year maintenance contract, the group was unable to produce gas. Therefore, in 2018, Iraq entrusted the development to the state-owned Midland Oil Co.
After the contract with the consortium was terminated in 2020, Iraq invited international companies to participate in the Mansouriya project. The Russian Gazprom Neft has expressed interest in its development.
In April 2021, Iraq awarded the Mansouriya contract to Sinopec. It was expected that production at the field would be 300 million cubic meters. feet of gas per day, the raw material will be used to produce electricity. Under the terms of the 25-year contract, Sinopec owned 49% of the project and Iraqi state oil company Midland owned 51%.
