Iran is ready to export technical and engineering services to Iraq and help the neighboring country develop its oil and gas industry, managing director of the National Iranian Oil Company said.
Mohsen Khojastehmehr made the announcement on Wednesday at the meeting of the Joint Working Group on Iran-Iraq Oil Cooperation, the Oil Ministry’s news agency Shana reported.
“It is time for Iran and Iraq to take practical steps to cooperate in the fields of oil and gas, as well as in the scientific, technological and educational sectors to increase economic relations between the two countries,” he added.
Referring to the oil and gas potentials of the two countries, Khojastehmehr said Iran and Iraq are influential countries in the Organization of Petroleum Exporting Countries that must work diligently to ensure energy security in the region.
Also speaking at the meeting, Iraqi Deputy Oil Minister Bassem Mohammad Khedir underlined the desire of Iraqi Oil Minister Ihsan Ismail to develop relations and take broader steps through the formation of a joint working group with Iran, stressing that a roadmap should be prepared for outlining the future steps and goals of the two countries.
“Another important issue is Iranian technology and products. For example, Iran already has high capacity in many sectors such as power cables, pipes and fittings and up-to-date technologies that can be transmitted to us,” Khedir said.
“The most important thing for Iraqi oil industry officials at present is to develop cooperation and get results from interaction. We hope this trip will be the beginning of a broader cooperation, especially in the scientific and technical discussion of the remaining cases between the two nations. The issue of transfer of expertise and technology.”
The current capacity of Iran's oil production is about 4 million barrels per day and gas output capacity is 1 billion cubic meters per day.
According to Khojastehmehr, about $90 billion of investments are needed to increase the crude oil production capacity to about 6 million bpd in the next eight years and $70 billion to raise the gas output to 1.5 bcm/d.
Iraq’s energy sector is closely tied to Iran. Baghdad depends on electricity and natural gas imports from its neighbor to power its national grid. Iraqi officials have said it would be impossible to sever ties with Iran to comply with US sanctions. Iraq has been repeatedly granted waivers by the US to continue its Iranian imports.
Iran had over the past year cut a substantial amount of natural gas supplies to Iraq, as the delay in setting a budget by the Iraqi federal government impeded Baghdad’s ability to repay over a billion dollars’ worth of debts owed to Tehran.
However, earlier this month, Iran announced that Iraq paid $1.6 billion for gas imports, opening the possibility of further cooperation between the two countries.
Iraq suffers from chronic electricity shortages, especially when summer temperatures surpass 50 degrees Celsius.
Joint Oilfields
Iran and Iraq in 2019 agreed to take practical steps for the joint development of two oilfields, namely Naft Shahr and Khorramshahr, on their shared border.
Naft Shahr field is located on the border between Iran’s Kermanshah Province and Iraq’s Diyala Province, some 570 kilometers west of Tehran. The Khorramshahr field is located on Iran’s southern border with Basra Province.
Earlier this year in March, a contract for developing the Sohrab Oilfield in Khuzestan Province was signed to produce 30,000 barrels per day.
The oilfield is located northwest of Ahvaz City and along the Iran-Iraq border and is shared with Hoveyzeh Oilfield in Iraq.
The contract was signed for cumulatively producing 160 million barrels of crude oil from the field.
Iran shares a spate of oil and gas reservoirs with neighboring countries, including several oil deposits with Iraq that shares over 1,400 kilometers of border with Iran to the west.
Iraq, emerging from years of conflict, is looking to rebuild its oil sector and infrastructure, something Iran can assist.
Given the lack of development in the petrochemical and gas industries in Iraq, there is a bright perspective for cooperation between the two countries.
An integrated development of oil and gas deposits shared by two or more countries is an increasingly common practice that helps cut back production costs and maximize output and profit.
