Iraq; 1,500 New Wells Offer Good OFS Prospects

DW Monday July 29, 2013: Iraq; 1,500 New Wells Offer Good OFS Prospects

 

With several operators confirming that production targets are being scaled back at their giant southern brownfield projects and a marked deterioration in the security situation, uncertainty continues to shroud the Iraqi oilfield services sector (OFS). With reduced targets taken into consideration, the ambition is for oil production capacity to exceed 8 million bpd in the mid-term, which is far higher than our view here at Douglas-Westwood. However, even in our 'internally constrained scenario', the scale of the market remains significant, requiring an estimated 1,500 new wells to be drilled, and expenditures exceeding $4 billion per year by 2016.The potential size of the opportunity makes it hard to ignore for operators and service companies alike.

 

Two parallel markets have been developing with the "Big-Four" service companies offering large integrated service packages in the south and more fragmentation in the exploration-oriented Kurdistan region in the north where more than 50 operators are active. In terms of supply of land rigs, our most recent analysis indicates that there are more than 90 in country operated by a mix of domestic, regional and western providers with a shortfall becoming apparent by 2015/16.

 

More information from Frank Wright, Douglas-Westwood Aberdeen (+44 1224 264972 orfrank.wright@douglaswestwood.com)