The international consortium developing Iraq’s 4 billion barrel Zubair field near Basra in southern Iraq has increased crude oil production by 10 per cent since signing a development deal with Iraq’s Oil Ministry in January 2010, the company announced in a 7 December statement.

Italy’s Eni leads a consortium of the US’ Occidental Petroleum and South Korea’s Korea Gas Corporation and the state-owned Missan Oil Company, which agreed to increase production by more than 1 million barrels a day (b/d) of oil in Iraq’s second oil and gas bid round in June 2009.

Production from the Zubair field has increased to more than 200,000 b/d from about 183,000 b/d when the consortium began field operations in the first quarter of 2010.

Having successfully hit its 10 per cent increase target, the consortium will now begin recovering its costs, earning $2 a barrel on the incremental oil production.

The group plans to raise production to 1.2 million b/d within the next six years and hopes to maintain that level for another seven years. It plans to invest about $20bn in the development of the field over the 20-year term of the contract, which can be extended to 25 years.

As part of Iraq’s first bid round, the consortium agreed to a soft-loan to the government of $300m. However, in April, the Oil Ministry agreed to slash the loan to on the West Qurna-1 and Zubair oilfield deals, turning them instead into unrecoverable signing-on fees. The Zubair field bonus was cut to $100m (MEED 18:4:10).