Iraq wants Sonangol to resume oil operations post ‘Jihadists’

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Iraq wants Sonangol to resume oil operations post ‘Jihadists’

4:33 CAT | 11 Jan 2017

A woman walks past the head office of Angolan state oil company Sonangol in the capital Luanda, file. REUTERS/Siphiwe Sibeko

A bola

The Iraqi oil Minister, Jabbar al-Luaibi, has asked the Angolan oil company Sonangol to resume operation in oilfields to the south of Mossul which have ceased to be in control of the jihadist Islamic State group.

The Qayyarah and Najmah oilfields, where wells were on set on fire by retreating Islamic State fighters, returned to Iraqi control in 2016.

According to a statement from the Iraqi oil ministry quoted by international agencies on 10 January, Minister Jabbar al-Luaibi asked Executive Administrator of the Angolan state oil company Sonangol, Edson dos Santos, to resume development of the Najmah and Qayyarah fields in Nineveh province.

Lusa reported in June 2015 that Angola could be at risk of losing almost EUR 300 million invested in oil activity in Iraq, according to independent comments on state accounts.

According to a report by Ernest & Young regarding Sonangol’s 2014accounts, the Angolan State oil sector group was active in the Middle East country, but due to the “context of existing insecurity in the fields”, operations were suspended and the administration decided to disinvest.

According to the auditor’s document, to which Lusa has access, there is overall investment of almost 38 billion kwanzas (EUR 293 million at 2015 exchange rates), “related to expenses with signature bonus, award prizes and exploration costs and evaluation” in Iraq.

Sonangol has held licenses to explore the Qayara and Najmah oilfields since 2009, but insecurity in these areas, due to the activity of armed groups, has affected investment.

Sonangol, which is wholly owned by the Angolan state, expects to “retrieve the investment referred to through the sale of participatory interests held”, the 2015 Ernest & Young report says.

“Currently, we have no evidence of negotiations with potential interested parties, and therefore cannot conclude as to the recoverability of the abovementioned amount,” the auditors conclude.

The Angolan oil company announced at a press conference in February 2014 that it was preparing to end operations in Iraq because of insecurity in the country, and had “already decided internally” to leave.

Source: A bola