IOCs to invest $100 billion to upgrade Iraqi oil fields

ExxonMobil Corp, BP PLC, and Eni SPA will invest $100 billion to upgrade three of Iraq’s oil fields, according to a senior government advisor.

"We have $100 billion for the three fields," said Thamer Ghadhban, senior energy advisor to Iraq’s Prime Minister Nousi Al-Maliki, referring to the West Qurna Phase 1, Rumaila, and Zubair fields.

Ghadhban said half the investment would be spent to upgrade West Qurna Phase 1, now under development by ExxonMobil, and that the other half would be spent by BP and Eni on their Rumaila and Zubair fields.

Ghadhban said most of the financing is for West Qurna 1 because the Rumaila and Zubair fields were “well advanced in terms of development, such as number of wells, oil field facilities, other infrastructure, while West Qurna Phase 1 needs more.”

The three fields are currently producing 2 million b/d, about two thirds of Iraq’s current output of 2.9 million b/d. But they are expected to reach 6.8 million b/d or more in 2017 under existing contracts.

Meanwhile, Ghadhban said Iraq has agreed with the IOCs to construct an oil field water injection plant designed to produce 10 million b/d of water to be injected in six major oil fields in southern Iraq.

“The two [sides] have advanced toward reaching agreement and we have passed the heads of agreement into the [front-end engineering and design] phase,” Ghadhban said.

Earlier this year, the consortia developing Iraq’s southern oil fields disagreed with the oil ministry over estimated water injection needs, which had doubled on previous estimates.

The IOCs involved in the water injection plan include ExxonMobil, BP, OAO Lukoil Holding, and Eni. Royal Dutch Shell PLC is expected to join later.

Contact Eric Watkins at hippalus@yahoo.com.

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