Bids due for Iraq brownfield deal

02 July 2012

Deadline set for 7 July for rehabilitation of Majnoon oil field production facilities

Contractors in Iraq have until the 7 July to submit proposals for an estimated $100m brownfield deal to rehabilitate crude oil production facilities at the Majnoon oil field in the south of the country.

UK-Dutch oil major Shell invited five engineering and construction firms to bid for on 6 May.

  • Punj Lloyd (India)
  • Dodsal (Dubai-based)
  • Saipem (Italy)
  • Consolidated Construction Company (Athens-based)
  • Enka (Turkey)

According to sources close to the project, the deal only covers construction. The UK’s Petrofac, has been awarded the engineering, procurement, construction and management (EPCM) deal and has carried out the engineering studies and detailed designs.

In 2009, the Oil Ministry said peak oil production was 80,000 barrels a day (b/d). Production averaged only 20,000 b/d in 2011. According to Shell, the current production potential is around 60,000 b/d and the company plans to rehabilitate production back up to the original design capacity of 100,000 b/d.

In addition to the rehabilitation work, the contractor will debottleneck the two degassing stations to increase production capacity to 120,000 b/d. There are currently 12 producing oil wells, some of which will require work-over to improve their technical integrity. The existing facilities do not have a functional emergency shutdown system. The facilities will be integrated into the new central processing facilities.

Shell is the operator of the Majnoon field, along with Malaysia’s Petronas and state-owned Missan Oil Company. The consortium agreed to boost production from its 2009 level of less than 50,000 b/d to a plateau of 1.8 million b/d in Iraq’s second oil field licensing round in late 2009. The fields output is expected to hit 175,000 b/d in 2012.

Petrofac won a $242m contract in April 2011 for the construction of early production facilities at the Majnoon field, which will produce 100,000 b/d. Work is expected to be completed by the end of 2012.

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