Angola’s state oil producer, Sonangol, has begun investing in the Najma and Qayarah oil fields in northern Iraq.
The company will begin drilling in April 2012, says Mohammad al-Juburi, a member of the Ninewa provincial council where the fields are located, Aswat al-Iraq news agency reports
Sonangol was the only international oil firm to submit a bid for either of the fields in Iraq’s second oil and gas field licensing round in December 2009. The company agreed to raise production at the Najma field, 50 kilometres south of Mosul in the north of Iraq, to 110,000 barrels a day (b/d) for a remuneration of $6 a barrel. The field contains an estimated 858 million barrels of oil (MEED 2:2:10).
The company also agreed to raise production at the nearby 807 million barrel Qayarah field to 120,000 b/d for a fee of $5 a barrel. Neither field is producing any oil at present.
The remuneration fees will be payable once Sonangol reaches an initial production of 20,000 b/d at Najma and 30,000 b/d at Qayarah. Close to the semi-autonomous Kurdistan region, the fields lie in an area suffering from very high degrees of insecurity and political instability.
Analysts have questioned Sonangol’s ability to develop the fields, particularly given its lack of significant international experience. In August 2010, Sonangol held talks with the US’ Occidental and Indonesia’s Pertamina to discuss a possible tie-up for the fields, but the Oil Ministry has previously signalled its unwillingness to see the awarded contracts changed through farm-ins.