IOSC JV to boost oil production in Iraq
Uchenna Izundu
OGJ International Editor
LONDON, Mar. 1 -- Mesopotamia Petroleum Co. Ltd. (MPC) has signed an agreement with Iraqi state-owned Iraqi Drilling Co. (IDC) to form a new joint venture focusing on increasing oil and gas production in Iraq.
"This is the Iraqi ministry of oil's first joint venture agreement of its type signed with a foreign company since the fall of the regime of Saddam Hussein in 2003," said MPC.
The company's name will be Iraqi Oil Services Co. LLC (IOSC), which will drill several wells for the nation's oil companies and international operations. On a conservative basis, these are expected to yield 5,000 b/d/well. About 60 wells/year are to be drilled around Basra as soon as possible, according to IDC.
In 2008 Iraq produced 2 million b/d, which the ministry is eager to boost to 3 million b/d as soon as possible and to 4.4 million b/d within the next 4 years. Iraq wants to achieve 6 million b/d of production by 2013.
"The parties to the joint venture intend to invest a total of $400 million to enable [IOSC] to purchase and operate 12 new drilling rigs and for provision of logistical support and working capital in order to deliver state-of-the-art performance in its operations," MPC said. IOSC also wants to improve local Iraqi expertise and integrated drilling technology.
IOSC is owned on a 51-49 basis by IDC and MPC respectively. MPC was founded by Ramco Energy PLC and Midmar Energy Ltd.
Idriss Al-Yassiri, director general of IDC, said IOSC had great potential inside and outside of Iraq.
Steve Remp, executive chairman of MPC, added that IOSC's longer-term ambition is to emerge as a partner with Western oil consortia in future field development projects.
This initiative builds on a wave of deals Iraq has signed to encourage investment and boost oil production, such as the $3.55 billion reconstruction agreement with SK Corp. (OGJ Online, Feb. 24, 2009) and an upgrade of its oil export terminal (OGJ Online, Feb. 20, 2009).
Iraq's State Company Oil Project has also contracted Technip SA to do the front-end engineering and design for a 140,000 b/d refinery in Karbala. This lump-sum contract is worth more than €20 million and will be finished in the first half of 2010.
Technip said it would include 18 process units based on state-of-the-art technologies, related utilities, offsite facilities, and a dedicated power plant.
The products will be LPG, gasoline, jet fuel, diesel oil, asphalt, and fuel oil, mainly for the domestic Iraqi market.
Contact Uchenna Izundu at [email protected].