US oil major Exxon Mobil is no longer in talks with Iraq over the planned Common Seawater Supply Project (CSSP), according to Ihsan Ismaael, director general of Basrah Oil Company (BOC).

Despite the breakdown in talks, BOC still intends to award engineering procurement and construction (EPC) contracts before the end of July, Ismaael told reporters on Wednesday.

BOC has shortlisted three companies, he said. 

Ismaael said BOC is still in talks with Exxon over other projects in the south of Iraq, including the development of the Nahr Bin Umar and Artawi oil fields, and building export facilities.

ExxonMobil has been in discussion with Iraq over partnering on the project for more than two years. 

In October 2017, it was reported that the two parties were close to a final agreement on the project, but talks broke down in April. 

State-owned Basra Oil Company (BOC) is the project client and US-based CH2M is project management consultant (PMC) on the CSSP. 

The project will provide the operators with water to inject into oil reservoirs to increase pressure and boost recovery. It will also free up fresh water for use by the local population.

Under the original plans, the CSSP was due to have a budget of $13bn and the capacity to deliver 12.5 million barrels a day (b/d) of seawater through 426 kilometres of pipeline, including eight interconnecting stations and 10 delivery stations. Since then, the scale of the project has been significantly scaled back. 

The CSSP has suffered several setbacks since it was first conceived. Originally led by ExxonMobil, responsibility for the project was transferred to CH2M in a $170m deal in late 2012.

A front-end engineering and design (feed) study on the pipelines to transport the seawater to oil fields was carried out by Austria’s ILF Consulting Engineers, with the group announcing the contract in December 2014. Separate feed studies were completed in 2016 by US-based Parsons.  

These concerned water intake and outfall structures, a shipping channel, offloading facility, seawater treatment facility and a gas turbine power plant.