Iraq delays offshore oil export award

27 September 2011

Australia’s Leighton Offshore set to win $550m contract

Iraq’s Oil Ministry has delayed the signing of a $550m contract with Australia’s Leighton Offshore to build a subsea oil export pipeline at Basra in the south of the country because of increased scrutiny from one of the government’s anti-corruption bodies, which is looking into all major contract awards.

The Oil Ministry was supposed to sign a letter of intent on 25 September, but the ceremony has now been postponed until 10 October. Sources close to the scheme say it could be delayed further.

“The Commission of Integrity (COI) is looking at everything, all major contracts. Expect at least a three-month delay,” says a source close to state-owned South Oil Company (SOC).

The COI is an independent governmental body, one of three anti-corruption agencies established in 2005 and responsible for fighting corruption in the country.

In late-July, MEED reported that Leighton had been recommended by SOC to the Finance Ministry for approval. The project will include the installation of a 45-kilometre trunk line and a 10km onshore pipeline, both with a diameter of 48 inches connecting inland oil storage and offshore shipping terminals (MEED 22:7:11).

On 17 September, Iraq’s Cabinet finally approved a $468.5m contract with Italy’s Saipem to build a new metering and export platform after recommendation by the US’ Foster Wheeler, which provides project management and engineering for the expansion scheme.

Iraq plans to lift export capacity to 4.5 million barrels a da (b/d) from the current 1.8 million b/d. The first of the three offshore single-point mooring stations (SPM) is scheduled for completion before the end of 2011. The two remaining SPMs are scheduled for completion by March 2012. Phase two is scheduled for completion between 2013-15.

A MEED Subscription...

Subscribe or upgrade your current package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.

Get Notifications