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The big deals that shaped oil and gas in 2023

Saudi Aramco employees on site. Indian Oil and Bharat Petroleum plan to import an additional one million bpd each from Saudi Aramco Reuters
Saudi Aramco employees on site. Indian Oil and Bharat Petroleum plan to import an additional one million bpd each from Saudi Aramco

Throughout 2023, Gulf states sought to ramp up their potential production output, even as thoughts turned to Cop28 and an eventual transition away from hydrocarbons. As the year draws to a close, AGBI looks at some of the biggest deals in the regional oil and gas sector in 2023

Jafurah Basin

In Saudi Arabia, Saudi Aramco announced the second phase of the Jafurah Basin, an enormous shale gas play to develop upstream petrochemicals and divert lucrative crude oil into exports. 

The company expects to recover at least 200 trillion cubic feet of raw, rich gas over the next 50 to 100 years.

Alexandre Araman, principal analyst, Middle East Upstream at Wood Mackenzie, noted that the field contains valuable liquids-rich gas, and reservoir properties, which compare favourably with several of the top US unconventional plays. 

“The full-field development is hugely capital intensive with estimates of $110 billion and will provide 2 billion cubic feet per day of sales gas, 630 thousand barrels per day of condensate and natural gas liquids, plus 418 million metric cubic feet per day of ethane,” Araman said.

Qatar’s North Fields

In Qatar, QatarEnergy signed 27-year agreements with TotalEnergies, Shell, Eni, and Sinopec for supplies from North Field East and North Field South. 

With 32 million metric tonnes per annum (mmtpa), North Field East is the single largest liquefied natural gas (LNG) project in history.

At full production, the development will increase Qatar’s LNG export capacity by 43 percent to 110 mmtpa in the second half of this decade.

North Field South will add 16 mmtpa of export capacity by 2030. QatarEnergy still has 27 mmtpa of LNG available for marketing across both expansion projects.

“We expect agreements with ExxonMobil and PetroChina to follow this year,” Araman said.

Adnoc oil and gas deals

In the UAE, Abu Dhabi state oil producer Adnoc awarded engineering, procurement, and construction contracts worth nearly $17 billion for its Hail and Ghasha sour gas development, the largest capex investment of its kind globally in 2023. Initially expected in 2020, the much delayed project is expected to cost around $28 billion, Araman said.

Adnoc also awarded a $400 million contract for a low-carbon LNG project in Ruwais, which will nearly triple its LNG exports. The two-train facility will have a total capacity of 9.6 mmtpa and was initially planned in the northern Emirate of Fujairah. It will be fully electrified and powered by nuclear and solar energy sources.

“This would appeal to international markets with strict restrictions on carbon emissions,” Araman observed. 

Iraq developments

Iraq’s Ministry of Oil announced a licensing round featuring 30 blocks primarily focused on gas exploration in the country’s western governorate of Anbar and northern governorate of Nineveh. 

Iraq signed a $27 billion deal with France’s TotalEnergies to increase oil production and build renewable energy facilities. The long-delayed agreement represents the biggest single foreign investment in Iraq, Opec’s second-largest crude producer.

The International Court of Arbitration in Paris ruled in favour of Iraq in its case against Turkey for violating a 1973 pipeline transit agreement. As a consequence, Turkey closed the pipeline, an essential source of revenue for the semi-autonomous Kurdistan region and a major source of sour crude for refineries in the Mediterranean market.

The court ordered Turkey to pay Iraq $1.4 billion in compensation, but Turkey deined the claim. Kurdistan’s oil production dropped from around 440,000 bpd in March to 120,000 bpd the following month.

Turkey has officially declared the pipe operational but production has not restarted yet.

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