Page 10 - MEOG Week 33 2021

MEOG PROJECTS & COMPANIES MEOG
Deal signed with CNOOC as Iraq looks to expand output
IRAQ
THE state-owned Iraqi Drilling Co. (IDC) this week signed a preliminary agreement with the China National Offshore Oil Co. (CNOOC) to drill 150 wells across the southern Missan province. The news comes as the Ministry of Oil (MoO) seeks to increase oil production from fields around Baghdad, Basra, Kirkuk and Nasiriyah as part of its strategic goal of 8mn bar- rels per day (bpd) by the end of 2027.
The local Alsabah newspaper quoted IDC director Bassim Abdul Karim as saying that dis- cussions for the work had begun two years ago but had been delayed because of issues related to the spread of coronavirus (COVID-19).
“We have resumed those negotiations, which have now produced a preliminary agreement with CNOOC to develop 150 wells in Buzurgan field,” he said.
The official said that the contract would be carried out in two stages, the first of which would include the drilling of 71 wells with the second to be kicked off at a later date.
Abdul Karim noted that 22 of the wells would be drilled in partnership with China National Petroleum Corp. (CNPC) subsidiary CNPC Bohai Drilling Engineering Co. (BHDC) “at a cost of up to $160mn”.
Buzurgan, along with Abu Ghraib and Faqqa, comprise the Missan Oil Fields concession which is overseen by the Missan Oil Co. (MOC).
A 20-year technical services contract (TSC) was awarded in 2009 to a consortium of CNOOC (63.75%), Turkey’s TPAO (11.25%) and IDC (25%), calling for plateau production to reach 450,000 bpd based on a maximum remuneration fee of $2.30 per barrel. The fields are believed to hold combined reserves of 1.5-1.7bn barrels.
MOC also oversees the development of the PetroChina-operated Halfaya field and the Amara and Noor fields which are operated under state control.
Other fields
The IDC director also disclosed that work is underway to increase drilling at larger assets in the south of the country.
He said that the company is “currently imple- menting a plan to drill 20 wells in the Nasiriyah field, with the participation of the American company Weatherford, which will enhance the strategy of escalating production and export capacity in the future by up to 60 thousand bar- rels per day”
The field is believed to hold crude oil reserves of around 4.4bn barrels.
Meanwhile, IDC “is in the process of sign- ing” a two-year contract with Italy’s Eni for the drilling of 37 wells at the Zubair oilfield which
the IOC operates. He added that Eni “recently delivered 14 oil wells and started drilling 3 new wells within a previous contract, bringing the total drilling contracts to about 54 wells in the giant field.”
As with the Missan Fields, the TSC for Zubair was awarded in 2009, and following the depar- ture of Occidental in 2015, the shareholding is comprised of Eni (41.56%), South Korea’s KOGAS (23.75%), state-owned Basra Oil Co. (BOC, 29.69%) and another state partner has 5%, according to the Italian firm.
The original contract stipulated a production plateau of 1.2mn bpd, but this was amended in 2013 to 850,000 bpd and extended by five years. The maximum remuneration fee for the field is $2 per barrel.
Meanwhile, despite rumours circulating about BP’s potential spin-off of its Iraqi assets, Abdul Karim noted that “after entering into a competition with major foreign drilling compa- nies to acquire a contract to drill 30 wells in the Rumaila field, west of Basra, it was transferred to the British oil company”.
He added that the company had emphasised its “readiness to start drilling operations directly upon the announcement”.
BP holds 38% in the Rumaila Operating Organisation (ROO) and is partnered by Pet- roChina (37%), Iraq’s state oil marketer SOMO (25%) and state-owned Basra Oil Co. (BOC) on a long-term technical service contract (TSC) which expires in 2034.
The super-major took operatorship of the asset in 2009 following Iraq’s first licensing round and the original plateau target envisaged production of 2.85mn bpd with a maximum remuneration fee of $2 per barrel.
The situation bears similarity to that of West Qurna-1 where in June, operator ExxonMobil signed an agreement with the MoO, BOC and services firm Schlumberger to drill 96 wells allowing for an increase in output capabilities from the current 500,000 bpd to 700,000 bpd despite having sought arbitration following frus- trated efforts to sell its 32.7% stake in the asset.™
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Week 33 18•August•2021