UAE-based Dana Gas, a partner with Crescent Petroleum and other entities in the Pearl Petroleum consortium that operates the Khor Mor project in Iraqi Kurdistan, announced on April 3 that production at the KM-250 project had reached 500mn barrels of oil equivalent per day (boepd), and that natural gas production had increased to 525mn cubic feet (14.9mn cubic metres) per day in early March.

Khor Mor is located in northern Iraq within the semi-autonomous territory controlled by the Kurdistan Regional Government (KRG). Khor Mor is the largest non-associated gas field in Iraq and has been under operation since 2008. But efforts to move forward with the KM-250 expansion project has in recent years been delayed by the coronavirus pandemic and some security problems.

According to a statement released by Dana Gas, work on the KM-250 expansion project will accelerate with completion and full commencement scheduled to take place in first quarter 2026 (Q1 2026). Production capacity will increase to 700 mmcf (19.8 mcm) per day from the current capacity of 450 mmcf per day by that time.

Besides the 525 mmcf per day production level in early March – an increase of 75% since 2017 – Khor Mor is producing 15,200 bpd of condensate and 1,070 tonnes per day (tpd) of LPG. Pearl Petroleum also operates processing and power generating facilities that are supplying the KRG with about 75% of its electricity generation. 

The $1bn expansion project has been financed in part by the US Development Finance Corp. (DFC), with funding amounting to $250mn. The money has enabled the project to advance in recent months through “fast-track simultaneous project construction and commissioning activities, enabling the company to cut the overall project schedule by several months,” the statement released by Dana Gas said.

“We are at the start of an exciting new chapter for Pearl Petroleum with the imminent completion of the KM-250 expansion project, initial appraisal and development of the Chemchemal Field and an appraisal strategy to further unlock hydrocarbon potential of the Khor Mor Field,” Majid Jafar, CEO of Crescent Petroleum and board managing director of Dana Gas, said in the statement. “This work will further enhance the energy sector and economy of the Kurdistan Region and all of Iraq.”

The Khor Mor facilities operated by the consortium partners provides the fuel for around 75% of the KRI’s electricity generation, enabling affordable power for more than 6mn Iraqis in the KRI and other governorates of Iraq. With total investment to date exceeding $3.5bn, the operations have created more than 20,000 direct and indirect jobs in the region. Pearl Petroleum uses over 80% local employment in operations, including in management positions, and it has enabled fuel cost savings for the government.

Building on the immense potential of the Chemchemal field, the Pearl Petroleum partners also announced commencement of activities to appraise the Chemchemal Cretaceous reservoir and initiate production of up to 71 mmcf per day during 2026, according to the statement. The partners have committed $160mn to drill three wells, install an extended well test (EWT) facility, and construct associated enabling infrastructure.

Pearl Petroleum is also considering further financing options and has engaged DNB Markets, part of DNB Bank, and Pareto Securities as Joint Lead Managers and Bookrunners to arrange a series of fixed-income investor meetings.

The consortium was founded in 2009 with Dana Gas and Crescent Petroleum as joint operators with a 35% equity share each. OMV, MOL and RWE subsequently joined the consortium with a 10% share each.