Zubair output hits cost-recovery threshold

Crude oil production from Zubair field in southern Iraq has achieved the 10% boost triggering cost recovery for companies redeveloping the field under a technical service contract.

Dec 6th, 2010

By OGJ editors
HOUSTON, Dec. 6
-- Crude oil production from Zubair field in southern Iraq has achieved the 10% boost triggering cost recovery for companies redeveloping the field under a technical service contract.

Zubair production has climbed to 201,000 b/d from 183,000 b/d, its level when the contract took effect last Feb. 18. Members of the contractors’ group now earn a remuneration fee of $2/bbl on incremental oil production.

Eni SPA is lead contractor with a 32.81% share. Other group members are state-owned Missan Oil Co. of Iraq, 25%, Occidental Petroleum Corp., 23.44%, and Korea Gas Corp., 18.75%.

The group expects to invest $20 billion under the 20-year contract with state-owned South Oil Co., targeting production of 1.2 million b/d within 6 years. The contract term can be extended to 25 years.

When it received the contract, Eni said the project would include the drilling of more than 200 wells, construction of treatment facilities and the required collection network, and refurbishment of existing plants.

Eni estimates Zubair holds recoverable reserves exceeding 6 billion bbl.

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