Ramco Energy of Aberdeen said yesterday the joint venture between state-owned Iraqi Drilling Company and Ramco’s 32.7%-owned Mesopotamia Petroleum had agreed a deal to explore for oil in the Middle Eastern country.
The Aberdeen company said the deal – the first joint venture between a British company and Iraq’s Ministry of Oil – would cover drilling of 60 wells a year, starting this year. Shares in Ramco jumped 16.75p or 39% yesterday and closed at 58.75p.
The joint venture, which will have start-up capital of £63million and will be 51%-owned by Iraq and 49% by Mesopotamia, is expected to raise Iraq’s oil output by 120,000 barrels per day within a year.
It is planned to invest £280million to acquire and operate 12 new drilling rigs and to provide logistical support and working capital.
The first wells to be drilled by the venture, called the Iraqi Oil Service Company, will be in the southern oil fields of Bazargan, Fakka and Halfaya, the last of which is classed as a super-giant with more than 5billion barrels of oil reserves.
Steve Remp, chairman of Ramco and also of Mesopotamia, signed the deal along with Iraqi oil minister Hussein al Shahristani.
Idrees al Yassiri, head of Iraqi Drilling Company, said Mesopotamia had been selected because it was persistent, willing to come to Iraq when other firms were still hesitating, and it deserved to be given the job.
Iraq needs short-term measures to boost oil output. The country has the world’s third-largest proven oil reserves of 115billion barrels of oil but needs funds to rebuild after six years of war triggered by the US-led invasion of 2003.
The country’s current production is around 2.3-2.4million barrels per day (bpd) and crude exports, 80% of which go through the oil ports in Basra province in the south, have hovered around 1.8-1.9million bpd. Overall output is below pre-invasion levels because of sabotage and the dilapidated state of oil infrastructure after years of war, international sanctions and under-investment.
Iraq is opening up its vast, and largely under-exploited, oil and gas fields to international firms this year through two bidding rounds for service contracts.
Ramco also has 100% of Ramco Oil and Gas, with interests in Bulgaria and Montenegro, 100% of Eagle HC, which has royalty interests in the UK North Sea, 38.9% of Ireland-based Lansdowne Oil and Gas, and 88% of marine energy firm SeaEnergy Renewables.