Iraq has entered into significant energy agreements with UAE-based Crescent Petroleum, targeting the development of three oil and gas fields in the Basra and Diyala provinces, as reported by Reuters on Oct 15. The three 20-year contracts, inked in February, mark a substantial step in Iraq’s energy sector. According to the country’s oil ministry, these contracts are slated to commence production, generating 400 million standard cubic feet per day of natural gas within the next 18 months.

The development holds immense promise for Iraq as it struggles to address its energy challenges. Historically reliant on Iranian gas imports to power its grid, Iraq has faced pressure from the United States to reduce this dependence. These new contracts with Crescent Petroleum offer a domestic solution, potentially allowing Iraq to curtail its reliance on external sources. By processing the extracted gas alongside crude oil, the country can mitigate environmental concerns by reducing gas flaring, a practice it currently employs due to a lack of facilities for processing into usable fuel for both local consumption and exports.

Sources:

https://www.reuters.com/business/energy/iraq-uaes-crescent-launch-deals-develop-three-oil-gas-fields-2023-10-15/