Inpex, Ivanhoe pursue Iraqi heavy oil venture

By OGJ editors
HOUSTON, Apr. 20 -- Ivanhoe Energy Inc. and Japan's Inpex Corp. have agreed to jointly pursue an opportunity to develop Qaiyarah heavy oil field in northern Iraq.

Qaiyarah, discovered in 1927, is 45 miles south of Mosul. Crudes in the area are 11-18° gravity and contain roughly 8% sulfur. The oil, not yet commercially refinable, is in Lower Miocene and Upper Cretaceous limestones.

Ivanhoe Pres. and Chief Executive Joe Gasca said the field is a "very suitable candidate for heavy oil development" and processing with its HTL upgrading technology (OGJ Online, July 14, 2006).

Ivanhoe previously carried out a detailed analysis and generated data about the applicability of its heavy oil upgrading technology for development of the field. This work resulted from a memorandum of understanding signed in late 2004 with the Iraqi Ministry of Oil to evaluate the field's commercial development potential (OGJ, Oct. 18, 2004, Newsletter).

Under the new agreement, Inpex will pay Ivanhoe $9 million for previous field studies and related project costs and receive what an Ivanhoe press statement described as "a significant interest."

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