Iraq’s Khor Mor gas field, the country’s largest non-associated gas field, is set to increase output by 50% to 750 million standard cubic feet per day (MMscf/d) after the field’s key stakeholders, Crescent Petroleum and Dana Gas, delivered project KM250 eight months ahead of schedule. KM250 will also produce 7,000 barrels of condensate per day and 460 tonnes per day of LPG, supplementing the current production of 15,200 bbl/d of condensate and 1,070 t/d of LPG.
Located in the Kurdistan Region of Iraq (KRI), the project will bolster power generation and industrial growth across the KRI, underpinning the Kurdistan Regional Government’s initiative to deliver 24-hour electricity, while boosting power supply to other regions of Iraq. The $1.1 billion project was listed on the Nordic Alternative Bond Market and backed by financing from the U.S. Development Finance Corporation (DFC) and the Bank of Sharjah, as well as proceeds from Pearl Petroleum's $350 million senior secured bonds. Crescent Petroleum and Dana Gas own 35% stake apiece in the Khor Mor gas field.
"Delivering KM250 ahead of schedule marks a significant achievement for Crescent Petroleum, Dana Gas, and our Pearl Consortium partners. This accomplishment highlights our ongoing dedication to the Kurdistan Region of Iraq, demonstrates our capacity to unlock its vast energy resources, and reinforces our commitment to generating jobs, enhancing local services, and providing cleaner, more reliable energy for the Region and the Country," said Majid Jafar, CEO of Crescent Petroleum.
Iraq’s energy sector is currently going through a renaissance. The Kurdistan Region has exported ~2.5 million barrels of crude since flows resumed on September 27, two-and-a-half years since they were suspended. Exports came to a halt in early 2023 after the International Chamber of Commerce (ICC) ruled that Turkey had violated a 1973 treaty by buying Kurdish crude without Iraq’s consent. Meanwhile, French oil and gas multinational, TotalEnergies (NYSE:TTE), has started the Gas Growth Integrated Project (GGIP), a multi-energy initiative in Iraq valued at $27 billion, after reaching an agreement with the government of Iraq in 2024 to start the long-delayed energy project.
The project involves several components, including developing the Ratawi oil field, constructing a 1GW solar farm, and building a seawater treatment plant. The first phase of the oil project aims for 120,000 b/d production by early 2026, while the solar component is expected to start delivering power by the end of 2025.
Total first signed a deal with the Iraqi government in 2021 that would see the company build four oil, gas and renewables projects in southern Iraq over 25 years with an initial investment of $10 billion. Unfortunately, the giant project was shelved amid disputes and squabbling between Iraqi politicians over the terms of the deal. However, Iraq finally agreed to a smaller 30% stake in the project, setting in motion a deal that could lure foreign investment back into the country. After years of instability, Iraq has been enjoying a period of relative stability, increasing the chances of foreign investors returning to the country.
"The government of Iraq confirmed the whole contract, no modification at all ... so that was for me more than good news," Total Chief Executive Patrick Pouyanne told Reuters.
Meanwhile, British Oil & Gas giant BP Plc (NYSE:BP) is set to begin the development of Iraq's Kirkuk oil and gas fields after finalizing a contract in March 2025. According to Iraqi officials, Kirkuk oil fields are currently producing 245,000 barrels of crude per day. The Kirkuk Field is one of the world's largest onshore oil fields, discovered in 1927, with an estimated recoverable oil of 10,000 million barrels. It is operated by the North Oil Company. Iraq is OPEC’s second largest producer after Saudi Arabia. Iraq's economy relies heavily on crude oil exports, with crude accounting for more than 90 percent of the country's revenues.
Oil prices have come under pressure, dipping to a five-month low after U.S. President Donald Trump ratcheted up U.S.-China trade tensions, while the International Energy Agency (IEA) has predicted a supply surplus in 2026. However, commodity analysts at Standard Chartered view the overly bearish sentiment as largely unwarranted, saying compensatory production cuts by Iraq and Kazakhstan will be enough to counter the ongoing unwinding cuts program by OPEC+.
The markets largely reacted positively after the eight producers that make up OPEC+ met virtually on 5th October, and with little fanfare announced 137kb/d more barrels to be added to the market in November. As expected, OPEC+ outlined the proposed compensation cuts for overproduced volumes by six members, led by Iraq, which has proposed an immediate 130 kb/d adjustment from August 2025 through January 2026, before slowing to 122 kb/d in June 2026. Commodity analysts at Standard Chartered have noted that Iraq will do most of the heavy lifting in OPEC+’s latest round of unwinding, with the country’s cuts alone nearly enough to neutralize the increase by the rest of the members.
By Alex Kimani for Oilprice.com
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