A Ukrainian company awarded a massive gas field project in Iraq nearly a year ago has not yet started work and the field has remained untapped, Iraq’s Parliament’s Oil and Gas committee has charged.

The state-owned Midland Oil Company (MOC) awarded the contract to develop the sprawling Akkas field in Iraq’s largest Alanbar Governorate to Ukrzemresurs Company in early 2024 as part of the sixth oil and gas concession licensing round announced by the OPEC producer within a post-war drive to rehabilitate its hydrocarbon sector.

Iraqi Parliament’s Oil and Gas Committee quickly criticised MOC’s decision on the grounds Ukrzemresurs is little known and does not possess the technology required to develop a huge field with estimated gas reserves of 5.6 trillion cubic metres, the second largest in the Middle East after Qatar’s North Field.

But the Oil Ministry defended the decision, saying the Company fulfilled the required standards and provided the requested financial and legal guarantees.

In a statement in June 2024, The Ministry said Ukrzemresurs was the only company willing to develop the field under the existing contractual terms as other firms demanded changes. The Ministry said it would soon process visas for the Company’s engineers and geologists to enter Iraq and take over the field.

“Akkas is the Middle East’s second largest non-associated gas field and this makes it a strategic project for Iraq…unfortunately, work has not started yet in the field because MOC awarded the project to a weak and fake Ukrainian company,” said Saadoun Allami, a member of the Oil and Gas Committee.

“It has been nearly a year since the project was awarded to that company…yet, the execution rate in the project is still zero,” he told Iraq’s Al-Sumaria TV at the weekend.

Allami accused MOC of failing to act against that firm by seizing the $50 million deposited by Ukrzemresurs as a bank guarantee, adding that this action is part of punitive terms in case the contractor does not embark on the project on time.

“The MOC Director is to blame for this problem because he is supposed to push for work on the project as soon as possible given its importance to Iraq..…this should prompt authorities to replace the Director,” he said.

Iraqi Oil Minister Hayan Abdel Ghani said after the Akkas was awarded last year that the project would add 100 million cubic feet per day (mcf/d) in phase 1 and 400 mcf/d when phase 2 is completed after four years.

Akkas field in the Western Al-Anbar, which shares borders with Saudi Arabia, Syria and Jordan, was abandoned by South Korea’s state-owned Korea Gas Corporation (Kogas) after it was captured by ISIS militants during the war nearly a decade ago.

Discovered in 1992, Akkas field contains around 5.6 trillion cubic feet of proven natural gas deposits, according to Iraqi estimates.

(Writing by Nadim Kawach; Editing by Anoop Menon)

(anoop.menon@lseg.com)

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