Eni, Iraq agree to cut Zubair output goal

Eni SPA has signed an agreement with Iraqi authorities lowering the production target for supergiant Zubair oil field to 850,000 b/d from the originally agreed 1.2 million b/d.

Under the agreement with South Oil Co. and the Iraqi Ministry of Oil, Eni’s technical service contract also was extended by 5 years until 2035.

The government awarded the contract in 2010 after its first bidding round.

Zubair produced about 183,000 b/d of oil when the contract took effect in February 2010. A 10% production increase later that year triggered cost recovery and allowed the contractors’ group to earn a remuneration fee of $2/bbl (OGJ Online, Dec. 6, 2010).

Infrastructure and supply constraints have combined with security problems to hamper development throughout Iraq and have caused the government to lower its production goal for 2017 from nearly 12 million b/d to about 9.5 million b/d. The lower target would be triple the current level and is still considered by many observers to be unreasonably high. At least some contracts covering other Iraqi fields are reported to be under renegotiation.

Eni, with 32.81% interest in the Zubair contract, leads a group that includes Missan Oil Co., 25%, Occidental Petroleum Corp., 23.44%, and Korea Gas Corp., 18.75%.

Did You Like this Article? Get All the Energy Industry News Delivered to Your Inbox

Subscribe to an email newsletter today at no cost and receive the latest news and information.

 Subscribe Now

Whitepapers

Logistics Risk Management in the Transformer Industry

Transformers often are shipped thousands of miles, involving multiple handoffs,and more than a do...

Secrets of Barco UniSee Mount Revealed

Last year Barco introduced UniSee, a revolutionary large-scale visualization platform designed to...

The Time is Right for Optimum Reliability: Capital-Intensive Industries and Asset Performance Management

Imagine a plant that is no longer at risk of a random shutdown. Imagine not worrying about losing...

Going Digital: The New Normal in Oil & Gas

In this whitepaper you will learn how Keystone Engineering, ONGC, and Saipem are using software t...