Oil Firms Boost Output at Iraq’s Zubair, Rumaila
|November 26, 2010||Filled under All Dinar Trade Articles|
Italian oil company ENI and its partners have hit their initial production target at Iraq’s Zubair oil field, boosting output to more than 220,000 barrels per day, a senior Iraqi oil official said.
Meanwhile at the super giant Rumaila oil field, the workhorse of Iraq’s oil industry, production is expected to reach the required 10 per cent increase by year’s end, said Dhiya Jaafar, head of the state-run South Oil Company.
“The production is increasing gradually,” Jaafar told Reuters in an interview on Thursday at his office in Basra, Iraq’s southern oil hub.
“At Zubair, Eni and its partners were able to achieve the required increase this year, which is 10 per cent of production. From 184,000 barrels per day, now we have exceeded 220,000 bpd,” he said.
ENI, US-based Occidental Petroleum Corp and South Korea’s Kogas signed a 20-year deal with Iraq to develop Zubair. They set an eventual output target of 1.2 million bpd.
Rumaila, with 17 billion barrels of estimated reserves, is being developed by Britain’s BP and Chinese partner CNPC. It produces almost half of Iraq’s total output of 2.5 million bpd.
“As for Rumaila, we have overcome the production decline problem,” Jaafar said. “We were supposed to reach the 10 per cent increase this month. Until now, for the net production rate, we haven’t achieved the 10 per cent … But this year we will achieve the 10 per cent increase in net production.”
He said production from Rumaila is over 1.138 million bpd and should reach around 1.160 million bpd this year.
The deals for Zubair and Rumaila were among a series of contracts signed by Iraq with global oil companies to boost production from its vast reserves.
If the projects turn out as planned, Iraq could raise its production capacity to levels of 12 million bpd and take a place among the world’s top producers.
Jaafar said Iraq and its partners had yet to decide the exact location of a multi-billion dollar water injection project to help boost production rates from the southern oilfields.
The project, to be led by Exxon Mobil, is to be built in the Khor al Zubair area of southern Iraq. A government spokesman said in September that it was expected to cost in excess of $10 billion.
“The project will be totally completed by the end of 2013,” Jaafar said.
Iraq is also planning to build infrastructure to boost its exports, including storage tanks and pipelines from Rumaila and Zubair to al-Faw port near Basra. The plan, which could cost $1.5bn, would include 12 storage tanks and pipelines varying from 105 km to 150 km in length.
“The Iraqi government has opened the way for contracting companies to invest and help in building storage tanks at al-Faw and crude pipelines from Rumaila and Zubair to al-Faw,” Jaafar said.
In addition to the contracts Iraq signed with international oil companies, the South Oil Co is drilling new wells and building pipelines and storage tanks at the Tuba and Nassiriya oilfields, as part of the company’s plans to boost oil production by developing the fields on its own.
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