Chevron-backed Shamaran targets 140,000 bpd for Iraq's Hamrin field

The Iraqi Oil Ministry has set a target to increase production at the Hamrin oil field to 140,000 barrels per day (bpd) during its peak phase. This goal represents a significant jump from the current output of approximately 20,000 bpd. The expansion plan follows estimates by development companies placing the field’s remaining oil resources and reserves at up to one billion barrels.

These strategic moves coincide with a merger agreement between Gulf Keystone Petroleum and Shamaran Petroleum, valued at nearly $601 million. According to a disclosure issued by Shamaran on October 20, 2026, the operator and management estimate the field’s remaining resources and reserves range between 500 million and one billion barrels. It is noted that these figures include total oil resources, not solely confirmed reserves.

Development timeline and capacity goals

Shamaran stated that the first phase of development aims to raise Hamrin’s production to about 60,000 bpd by 2028, which would triple the current level. Subsequent phases are expected to allow for further increases. When the development contract was signed last July, the Iraqi Oil Ministry announced the targeted peak capacity of 140,000 bpd, alongside daily associated gas production of 40 million standard cubic feet. The ministry did not specify a deadline for reaching this peak production level.

The project operates under a 25-year contract executed by HKN Energy in collaboration with Shamaran. Shamaran announced it holds a 25% stake in the company owning the field’s contract, which was previously managed by the North Oil Company of Iraq.

Economic impact and energy strategy

According to a ministry statement reported by network "964," Iraqi Oil Minister Basim Muhammad Khudair Al-Abadi said the agreement aims to meet local consumption needs, increase export volumes, employ Iraqi labor, and create opportunities for local companies. Dr. Jaafar Al-Husseini, an economics professor at the University of Baghdad, told "24" that developing Hamrin could yield substantial economic returns for Iraq, particularly as the field’s output helps satisfy part of domestic oil demand.

Al-Husseini explained that the expected revenue extends beyond crude oil. Development plans include investing in associated gas rather than flaring it, using it to power electricity generation stations, and injecting surplus back into the reservoir to enhance oil flow. He added that utilizing produced gas could reduce Iraq’s reliance on imported Iranian gas, with potential allocation for household consumption.

The Oil Ministry specified that associated gas in the development plan is designated to cover energy needs within the field itself. Surplus gas will be re-injected to support reservoir pressure, though no specific quantities allocated to the public electricity grid were announced.

Financial structure and corporate merger

Shamaran reported it would bear $35 million of its partner HKN’s share in initial project costs, along with $15 million to be paid from future cash flows according to agreement terms. The company noted that expected capital expenditure in subsequent development stages ranges from $2 to $3 per additional barrel, based on their estimates, but did not provide a final total cost for the project.

On October 21, the company announced the pricing of a $200 million bond issuance with an annual interest rate of 10.25%. Proceeds will be used to refinance existing debts of approximately $144 million, fund investments in Hamrin, and cover other general purposes, without allocating the entire bond proceeds exclusively to the field.

In parallel, both companies confirmed their stock-swap merger deal, valuing Shamaran shares at approximately $601 million. This figure represents the transaction value between the two firms, not the development cost of Hamrin. A joint statement indicated the new entity will combine interests in four Iraqi fields, with estimated production of around 53,000 bpd based on ownership stakes. Confirmed and probable reserves total 323 million barrels, excluding the additional potential of the Hamrin field. The companies expect to complete the merger in mid-2027 after securing necessary approvals.