Malaysia’s Petronas has awarded Weatherford International the engineering design for the development of the Gharraf oilfield in Iraq.

The US oilfield services company will design production facilities and an 80 kilometer pipeline at the 1 billion barrel oil field, sources close to the deal tell MEED. The remaining phases of the work are yet to be awarded. 

The Gharraf field was awarded to a consortium of Petronas, which is leading the development of the field, and Japan’s Japex in the country’s second oil field licensing round in December last year.

The field, which is not currently producing is located in the Thi Qar governorate in southern Iraq. The consortium paid a signature bonus of $100m and will receive a remuneration fee of $1.49 for each additional barrel produced over 35,000 barrels a day (b/d). The companies plan to increase production to 50,000 b/d by 2012 and 230,000 b/d by 2023.

Weatherford has been working in Iraq since 2006 and has completed six contracts for the state-owned South Oil Company. 

At the end of March, UK oil major BP awarded the US firm a drilling contract at the Rumaila oil field, along with Chinese drilling outfit Daging Oil Field Company and a joint venture of the US’ Schlumberger and state-owned Iraq Drilling Company. The deal for 49 new wells is worth a combined $500m (MEED 31:3:10).

In 2009 Weatherford secured three contracts for drilling in the south and in Kurdistan region, including a $224m deal to drill 20 wells in the southern Bazargan field in May.

The company plans to have more than 1,000 employees in the country by July. Although keen to work in the country, contractors have seen little movement from international oil companies in awarding contracts so far. The situation is likely to continue while Iraq remains in political limbo with the process of forming a viable government looking like it will drag on for a third month.