Oil & Gas

Iraq continues to advance its strategic efforts to maximize its oil and gas reserves through a newly launched program that targets the drilling of 15 exploratory wells. This initiative is expected to enhance state revenues and strengthen the national economy.

On June 1, 2025, Oil Minister Engineer Hayyan Abdul Ghani Al-Sawad attended the signing ceremony of the first contract under this program, marking the start of drilling the "Kafri A" exploratory well. The minister emphasized the importance of expanding oil and gas reserves to reinforce Iraq’s standing among leading oil-producing nations.

The contract was signed by the Iraqi Drilling Company, the Oil Exploration Company, and the North Oil Company, with key officials such as the Undersecretary for Extraction Affairs and directors from relevant entities in attendance. The project is part of a broader government program, with all drilling operations to be executed using national resources, now made possible by the allocation of necessary financial support.

The Ministry of Oil aims to conduct exploration across central, southern, and northern regions, where initial data indicates the presence of light crude and natural gas.

Officials, including Hassan Mohammed Hassan from the Iraqi Drilling Company and Amer Khalil from the North Oil Company, highlighted that this exploratory well is the first in the targeted area and holds significant potential for new reserves. The North Oil Company, based in Salah al-Din province, is tasked with providing logistical support to ensure the smooth completion of the operations. The discovery of new reserves is seen as a critical step in boosting the country’s hydrocarbon inventory and enhancing long-term energy security.

These developments come as Iraq faces increased domestic demand for oil, primarily for electricity generation. The country’s reliance on oil-fired power is rising due to reduced Iranian gas imports, especially during the summer when power outages are frequent. Projections indicate that domestic oil demand could surge by approximately 150,000 barrels per day between April and August 2025.

In contrast to the 10,000 barrels per day consumed in 2021 (excluding summer months), current estimates suggest usage may rise sixfold during peak demand, highlighting the urgency behind Iraq's exploration and energy diversification efforts.