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Azzaman, December 24, 2011
The Iraqi government has approved a contract under which a U.S. firm is to drill 60 new wells at al-Zubair oil field in the southern Province of Basra.
The deal is not part of the technical service contract Iraq’s South Oil Company has struck with Eni, Occidental Petroleum and KOGAS to develop Zubair, one of the world’s largest oil fields.
The consortium’s service contract will be solely financed by incremental production due to the consortium’s operations estimated to cost more than $20 billion over 20 years.
The new contract will be financed by the Iraqi government. The U.S. firm is under obligation to have the wells drilled in three years, government spokesperson Ali al-Dabbagh said.
Zubair currently produces about 200,000 barrels of oil a day but the volume is far below the output rate that can be retrieved as the field’s proven reserves are estimated at 4.5 billion barrels.
The foreign consortium led by Eni is expected to increase production from the field over the next six years to 1.2 million barrels a day, an increase of 1 million barrels daily.
The consortium will earn $2 for the incremental oil output beyond the current rate of 200,000 barrels a day. It will recover its expenditures estimated at $20 billion through a special cost recovery mechanism over the life of the 20-year long contract.
The latest contract for the drilling of 60 new wells in the field in three years shows that the government sees raising oil production as a top priority and that it does not have to wait long to see that happening.
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The Iraqi government has approved a contract under which a U.S. firm is to drill 60 new wells at al-Zubair oil field in the southern Province of Basra.
The deal is not part of the technical service contract Iraq’s South Oil Company has struck with Eni, Occidental Petroleum and KOGAS to develop Zubair, one of the world’s largest oil fields.
The consortium’s service contract will be solely financed by incremental production due to the consortium’s operations estimated to cost more than $20 billion over 20 years.
The new contract will be financed by the Iraqi government. The U.S. firm is under obligation to have the wells drilled in three years, government spokesperson Ali al-Dabbagh said.
Zubair currently produces about 200,000 barrels of oil a day but the volume is far below the output rate that can be retrieved as the field’s proven reserves are estimated at 4.5 billion barrels.
The foreign consortium led by Eni is expected to increase production from the field over the next six years to 1.2 million barrels a day, an increase of 1 million barrels daily.
The consortium will earn $2 for the incremental oil output beyond the current rate of 200,000 barrels a day. It will recover its expenditures estimated at $20 billion through a special cost recovery mechanism over the life of the 20-year long contract.
The latest contract for the drilling of 60 new wells in the field in three years shows that the government sees raising oil production as a top priority and that it does not have to wait long to see that happening.
[You must be registered and logged in to see this link.]
