Eni, Oxy and KOGAs Win Major Redevelopment Work at Iraq’s Zubair Oil Field

Eni, Occidental Petroleum (OXY) and Korea Gas Corporation (KOGAS) revealed today that the companies have signed a technical services contract with state-owned South Oil Company and Missan Oil Company of Iraq for the redevelopment of the Zubair oil field in southern Iraq.

The group plans to increase production from the Zubair field from approximately 200,000 barrels of oil per day to 1.2 million barrels of oil per day. Production will be ramped up over a six-year period and maintained for seven years after peak production has been reached. The contract is for 20 years, with a five-year extension.

The consortium will earn $2 per barrel on the incremental oil production, after production has been increased by 10%, and expenditures will be recovered through a cost-recovery system. The Eni-led group expects to invest some $20 billion during the 20-year contract.

According to a report from Oil & Gas Journal, the increase in production from Zubair will help to position Iraq as one of the world’s leading oil producers with an expected 8 million barrels of oil a day in seven to 10 years.

The Zubair Field Operating Division will oversee the redevelopment project, and many of the staff will be from South Oil Company. Eni holds 32.81% in the consortium, while Oxy has 23.44, Kogas 18.75% and Missan Oil 25%.

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