BP, CNPC increase production from Iraq's Rumaila field

Eric Watkins
OGJ Oil Diplomacy Editor

LOS ANGELES, Jan. 11 -- Output at Iraq’s giant Rumaila oil field has increased by more than 10% above the 1.066 million b/d target established in December 2009, when BP PLC and China National Petroleum Corp. (CNPC) signed a technical service contract to expand production.

“This production increase is an important step for Iraq and demonstrates the success of the contracts awarded,” said Iraq’s oil minister Abdul Kareem Luaibi, referring to the contract awarded to the two firms, along with Iraq’s State Oil Marketing Co. (SOMO).

Management of the field’s development has been carried out by the Rumaila Operating Organization (ROO), which was originally staffed by 4,000 employees from Iraq’s state-owned South Oil Co. along with 100 technical experts and managers from BP and CNPC.

BP said that the pace of activity on Rumaila has built steadily over the past year, with 20 new rigs now mobilized in the field. Altogether over the past year, BP said 41 wells have been drilled, 103 workovers completed, and 122 km of flowlines laid. Employment has more than doubled to 10,000 workers.

On signing the TSC in 2009, BP and CNPC said they planned to invest $15 billion in cash over the 20 year lifetime of the contract with the intention of increasing plateau production to 2.85 million b/d during 2005-10.

“Once production has been raised by 10% from its current level of about 1 million b/d, costs will start to be recovered, and fees of $2/bbl earned on the incremental oil production,” BP said at the time.

“Increasing production at Rumaila, the world’s fourth largest oilfield, has been a massive undertaking,” said BP Chief Executive Bob Dudley this week, adding that “We look forward to working with our partners to make Rumaila the world’s second largest oil field.”

In April 2010, BP let contracts worth about $500 million to three firms for drilling. Schlumberger, in partnership with Iraqi Drilling Co., received a contract for three rigs; Daqing Drilling a contract for three rigs; and Weatherford a contract for one rig (OGJ Online, Apr. 5, 2010).

The Rumaila consortium is comprised of BP, 38%, CNPC 37%, and SOMO, 25%.

Contact Eric Watkins at hippalus@yahoo.com.

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