BP-led consortium latest to renegotiate production levels
UK oil major BP is set to become the latest international oil company (IOC) to renegotiate its crude production target in Iraq, with a new deal for the Rumaila oil field in the south of the country.
Iraqs Oil Ministry is expected to formalise a new contract with a BP-led consortium before the end of the year, reducing the plateau production target for the Rumaila field to 2.1 million barrels a day (b/d), according to an announcement by Oil Minister Abdulkarim al-Luaibi.
The Rumaila contract initially envisaged increasing production capacity to about 2.9 million b/d by 2017, from just over 1 million b/d.
BP and its partner, China National Petroleum Corporation (CNPC), were awarded a 20-year technical services deal in late 2009 for the development of the 17 billion-barrel oil field as part of Baghdads first post-war oil field licensing round.
The consortium is the latest to renegotiate lower production targets as Iraq reassesses its future plans more than three years after signing a raft of service agreements to lift oil production.
Russias Lukoil was the first IOC to renegotiate its terms in January, reducing the production target at the West Qurna 2 oil field to 1.2 million b/d, from 1.8 million b/d.
In July, a group led by Italys Eni agreed to cut the production target at the Zubair oil field to 850,000 b/d, down from the original 1.1 million b/d agreed in 2010. The contract was also extended to 35 years from 20 years.
UK/Dutch oil major Shell is also in talks for a reduction at the Majnoon field, but these have not been concluded. The firm is seeking a lower level of 1 million b/d, instead of 1.8 million b/d.
Further announcements on new production levels are expected. Iraq is expected to take a final decision on its long-term production plans by the end of 2014, choosing between 9 million b/d by 2020 or 6 million b/d by 2025.
Iraq oil production targets | ||||
---|---|---|---|---|
Field | Operator | 2009 production (thousand b/d) | Original 2017 target (thousand b/d) | New target (thousand b/d) |
Badra | Gazprom (Russia) | 0 | 170 | 170 |
Gharraf | Petronas (Malaysia) | 0 | 230 | 230 |
Halfaya | Petrochina (China) | 0 | 535 | 535 |
Majnoon | Shell (UK/Dutch) | 0 | 1,800 | 1,000* |
Missan | China National Offshore Oil Company (CNOOC) | 87 | 450 | 450 |
Najma | Sonangol (Angola) | 0 | 110 | 110 |
Rumaila | BP (UK) | 1,000 | 2,850 | 2,100* |
Qayara | Sonangol | 0 | 120 | 120 |
West Qurna-1 | ExxonMobil (US) | 259 | 2,325 | 2,325 |
West Qurna-2 | Lukoil (Russia) | 190 | 1,800 | 1,200 |
Zubair | Eni (Italy) | 0 | 1,125 | 850 |
Total | 1,536 | 11,515 | 9,090 | |
*=Not yet signed. Source: MEED |
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