Samsung’s wait for Badra oilfield contract continues

20 January 2013

Negotiations continue with Gazprom-led consortium for estimated $900m central processing facility

Samsung Engineering is still in negotiations with a Russian-led consortium for an estimated $900m contract to build a central processing facility (CPF) at the Badra oilfield in the south east of Iraq.

The South Korean firm’s ten-month wait is set to last a little longer as negotiations with Russia’s Gazprom and its partners at the field continue, a source close to the project tells MEED.

Samsung emerged as the frontrunner for the CPF deal in April after they submitted the lowest priced proposal at less than $900m, beating rival proposals from the UK’s Petrofac and Italy’s Saipem in a mid-February bid round.

“Samsung has not received any official confirmation, such as a letter of agreement from the client, either from the Oil Ministry or Gazprom. They are still in negotiations and it could be until early February before anything is solidified,” says the source.

A number of news agencies reported a $879m contract had already been signed.

The scope of the CPF-2 project includes gas treatment and water injection plants as well as three trains for crude oil processing. According to MEED estimates, if the deal is awarded, it would be a second major oil facility contract for Samsung in Iraq making it the largest EPC firm in the country by contract value.

Samsung won a $998m EPC contract in March 2012 with the Oil Ministry and Lukoil, another Russian oil firm for early production facilities at the West Qurna phase 2 oilfield in the south of Iraq.

Gazprom leads the development of the 3-billion-barrel Badra oilfield in the Wasit province of eastern Iraq, along with Turkey’s TPAO, Malaysia’s Petronas and South Korea’s Kogas. First production from the field is expected in 2013. By 2017, production should reach a minimum of 170,000 barrels a day (b/d) from 17 operational wells and five injection wells.

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