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)|
|Missan||China National Offshore Oil Company (CNOOC)||87||450||450|
|West Qurna-1||ExxonMobil (US)||259||2,325||2,325|
|West Qurna-2||Lukoil (Russia)||190||1,800||1,200|
|*=Not yet signed. Source: MEED|