Malaysia’s Petronas is nearing completion of its project to raise the production capacity of the Garraf oil field in Iraq to 230,000 barrels per day after years of delay, according to Petronas Upstream CEO Adif Zulkifli.
“We are almost there … The plan is just to get to the contractual plateau as soon as we can, and to sustain it as long as we can,” he said, speaking on the sidelines of the Energy Intelligence Forum 2023 in London this week.
Garraf is one of the Malaysian national oil company’s three producing assets in Iraq, along with its minority interests in the Halfaya and Badra fields. All of them were awarded in the second bid round after the US invasion of Iraq.
The field currently produces around 130,000 b/d, according to Petronas’ minority partner Japex.
Adif said Garraf’s capacity has already reached around 200,000 b/d, but that Iraq’s Opec-plus production ceiling has prevented the company from testing that capacity, as well as causing problems around compensation.
It is just one of the difficulties that Petronas has encountered at Garraf, which have delayed the project and reflect Iraq’s famously difficult operating environment.
In an interview with Energy Intelligence in June, Adif noted that the Malaysian NOC is no stranger to difficult operating environments, having worked in some of the most difficult parts of the world, including South Sudan.
The Petronas executive told the Forum that his company is now putting a lot of effort into rationalizing its upstream portfolio.
This has involved divesting properties that don’t have a “high ESG score,” including assets located in Myanmar, Chad and South Sudan, as the company seeks to “future proof” itself for the energy transition.
Earlier this year, news emerged that Petronas was in talks with Indonesia’s Pertamina about selling its 45% operated stake in Garraf.
Adif did not say whether those talks had progressed, but Petronas has talked openly about problems at Garraf, where supply chain issues, poor planning by Iraqi state actors and the Covid-19 pandemic have all hampered progress.
In one case, a project to capture associated gas and send it to a nearby power plant was held up by delayed construction of the power plant.
In another example, water injection — an important component of the capacity expansion at Garraf — has been hampered by limited availability of water — even though Petronas has developed the necessary infrastructure.
Source: Energy Intelligence