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| Oil Investment contracts in Iraq aim to raise production to 12 million bpd |
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Posted on 2 Feb 2010 |
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Sources in the Ministry of Oil confirmed continuing signing of oil investment contracts with investment companies and coalitions.
For the development of the reality of the oil sector and increase production and double it from now. Especially that the Ministry of Oil and investment companies aim to reach 12 million barrels a day .And Iraq has signed with a consortium of international oil companies led by European giant oil ,Shell, a contract to develop huge Majnoon oil field which reserves are estimated at more than 12 billion barrels of crude oil, the largest Iraq’s undeveloped fields in the south of Iraq.
And the offer by the coalition considering Majnoon field, to produce one million eight hundred thousand bpd and receives payments at the service of companies from the Iraqi government is dollars and thirty-nine cents per barrel ..
Thamer Al Ghadban, Adviser to the Iraqi President under estimates of major companies to increase production due to development. “The increase in the country’s production to 6 million barrels a day was a realistic target over the past six or seven years with the knowledge that the companies that made the first round of bidding in the summer was estimated to increase production to up to 7 million barrels a day.
And all that remains much lower than the estimates which would increase production to 10 or 12 million bpd mentioned by international companies that compete in bidding for oil contracts Iraq.
Industry experts noted that the development of oil fields within the proposed licensing rounds will increase exports of Iraqi crude oil to seven million barrels per day over the next six years, noting that the country will jump from eleventh place currently occupied by the oil-producing countries to third through oil investment .
The contracts included the development of North and South Rumaila , West Qurna and Zubair in Basrah and Bazargan , Apogrb and Al Faka, in the province of Maysan, the fields of Kirkuk and Bai Hassan, which produce more than 80 % of Iraq’s oil production, in addition to two fields of natural gas.
Iraq has signed an agreement with the coalition led by Italyian ENI to develop Zubayr field , south of the country which its reserves amount four billion barrels.
Eni and its partners Occidental Petroleum from USA and South Korean Gas Company (Kogas) aim to increase the production of the field to 1.2 million bpd within the next seven years, instead of about 230 thousand bpd currently, and will get the coalition on two dollars per barrel under the contract, which runs twenty years. The company Kogas will invest 6.5 $ billion to develop the field which has not been awarded the contract for Zubair fields in the beginning, during the auction, which was conducted in June, but agreement was reached during the subsequent negotiations.
Analysts believe that the success of the second round due to the Iraqi government improvements of the conditions of contracts that meet the demands of global corporations, other factors continue to govern such contracts. Especially as the international companies want to work in Iraqi large fields , it was agreed in the first round, on Rumaila one of the biggest oil fields in Iraq, perhaps the biggest of all, if we add North Rumaila and South Rumaila .
And Shell and Petronas won Majnoon field, the largest field not developed in the world.
And the Chinese company and Total holding the smaller field Al Halfaya. In large fields the opportunity for global companies to maximize their profits more than in the small fields, especially in the contract system of existing common services.
According to what recently agreed, after several rounds of negotiations between Iraqi officials and representatives of major companies firms will receive a fixed amount and not on the proportion of profits .. The money would be for the cost of extraction, and agreed upon finally according to the increase in production and that an important gap as well. But the size of the fields is not the most important factor alone, there are also security concerns. At the same time the eastern fields did not receive, near Diyala and a field east of Baghdad, a large field reserves of more than twice the reserves of Halfaya, of any offers for their development.
Iraq’s oil is the less expensive oils extraction in the world, and compares the cost of extracting even of a country like Saudi Arabia, which produces light oil but the cost of production is times more than the cost of extraction in Iraq.
There is also a targeted production figures that the more it increases companies increased revenue from Iraq. And the investment in developing the capacity of Iraq’s oil is an urgent need because the country dependence on oil exports to fund 90% of expenditures. IRAQdirectory.com
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