Drilling site: investment from Russia in the oil industry is expected in Iraq

Baghdad wants to attract Russian investments in the Nasiriyah oil project with reserves of more than 4 billion barrels. This will strengthen economic ties between Moscow and Baghdad, Mazhar Mohammed Saleh, adviser to the Prime Minister of Iraq on economic issues, told Izvestia. The volume of investments in the project connecting the development of the field and the construction of the refinery can reach $50 billion. According to Saleh, the republic's policy of attracting Russian investment in the oil sector demonstrates a desire to strengthen economic cooperation with the Russian Federation.

Iraq is set to attract Russian investment in the oil sector

Iraq is waiting for Russian investments: first of all, we are talking about investments in the Nasiriyah oil project with estimated reserves of more than 4 billion barrels. The joint implementation of the project will strengthen economic ties between Moscow and Baghdad, Mazhar Mohammed Saleh, adviser to the Prime Minister of Iraq on economic issues, told Izvestia.

The volume of investments in the project, which combines the development of the field and the construction of an oil refinery, can reach $50 billion. Baghdad's policy of attracting Russian investment in the oil sector demonstrates its desire to strengthen economic cooperation with Russia.

—The Nasiriyah project represents a major opportunity for cooperation between Iraq and Russia in the energy sector,— Saleh said. — It is able to significantly strengthen economic relations between our countries and bring significant benefits to the Iraqi economy.

In February, the Iraqi government officially invited Gazprom to participate in the development of the Nasiriyah field.

"We highly appreciate this project. We have already agreed on it at the intergovernmental level, and now we are giving appropriate instructions to our companies to draw up a roadmap for the implementation of this project as soon as possible," Russian Energy Minister Sergei Tsivilev said at the time following a meeting of the Russian—Iraqi intergovernmental commission.

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According to Saleh, the project is important in the context of Russia's overall energy policy in the region, as Moscow seeks to expand its presence in the global energy market, occupying a special place in OPEC+ and strengthening its status as a reliable partner thanks to its technical and technological expertise.

— The possible volume of Russian investments depends on a number of factors, including the scale of the project and the degree of involvement of the Russian company Gazprom. Investments can be significant if appropriate agreements are reached with the Iraqi side," the prime minister's representative said.

Iraq's policy of attracting Russian investment in the oil sector reflects a desire to strengthen economic cooperation with Russia, Saleh stressed. "Such an approach can certainly have a positive impact on economic relations between our friendly countries, especially in building future bilateral ties," the adviser to the Prime Minister added.

Russian companies in Iraq

In February of this year, active discussions began between the Iraqi Oil Ministry and the Russian Energy Ministry on the possible participation of Russian companies in the investment and development of the Nasiriyah field, Govand Sherwani, an Iraqi expert in the oil and gas sector, explained to Izvestia. The development of Nasiriyah is considered one of the priorities, and the Ministry of Oil is striving to increase production here to about 60,000 barrels per day or more, the expert noted.

According to preliminary estimates, the reserves of the field exceed 4 billion barrels, but this figure can be clarified after concluding contracts with serious companies, including Russian ones, and conducting exploration using modern technologies, the expert noted. There is a possibility that real reserves will be higher than current estimates.

— The Iraqi Ministry of Oil expects to enter into partnerships with Russian companies to benefit from their experience in developing oil fields, especially given the ministry's desire to increase production over the past two years. Production is expected to reach about 7 million barrels per day by 2027," Sherwani said.

The Nasiriyah field, with estimated reserves of 4.36–4.4 billion barrels, is considered one of the largest in the country. It is located in the strategic southeastern region of Iraq, close to the Basra export terminal, a key hub for oil exports. This project will also serve as a logistics hub for all of Russia's oil and gas projects in southern Iraq. Control of this field will allow Russia to strengthen its position in the south of the country, complementing existing projects such as Badra in the province of Wassit, where Gazprom Neft owns a 30 percent stake.

Thus, the Nasiriyah oil field, with its vast reserves and strategic location, can become an important project capable of strengthening economic ties between Russia and Iraq and expanding Russia's influence in the global energy market. If successfully implemented, this project will make a significant contribution to the development of the Iraqi economy and provide new opportunities for cooperation in the energy sector.

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The export of hydrocarbons from the region is still suspended, the profitability of the projects is still questionable.

Nasiriyah is not only the development of a field, but also the construction of an oil refinery with a capacity of 300 thousand barrels per day. Estimates of investments in this project reach $50 billion. It is worth noting that so far Gazprom's invitation to develop the Nasiriyah field does not include plans to build an oil refinery, and the refinery project is likely to be implemented by a Chinese company, a senior Iraqi source told the Oil Price portal.

In July, the Iraqi government announced plans to resume oil exports from Iraqi Kurdistan via a pipeline to Turkey after a two-year hiatus, although shipments still have not started. At the same time, Russian companies Lukoil, Gazprom Neft and Rosneft continue to operate in Iraq, each of which has invested heavily in field development. The suspension of oil exports had a negative impact on their activities.

Previously, exports from Iraqi Kurdistan to the Turkish port of Ceyhan passed through a pipeline operated by a joint Russian-Iraqi venture, but now revenues via this route have stopped, and companies are forced to sell oil locally, mainly to local consumers, and at a significant discount. The decision to participate in the Nasiriyah project is likely to depend on the results of the resumption of exports, as this will affect the investment climate in Iraq.