Rumaila Oilfield Deal Signed in Iraq

The Iraqi government has approved a deal with a consortium led by British giant BP PLC to develop the Rumaila oil field in the south in a major step forward for the country’s oil industry.

Daily production from the Rumaila field stands at about 1 million barrels a day, almost half of Iraq’s daily output of 2.4 million barrels. BP’s targeted production is 2.85 million barrels per day.

Details of the BP/CNPC of China deal with the Iraqi government for the development of the Rumaila oil field

* BP and CNPC must improve the production rate of crude oil and natural gas liquids from Rumaila by 10 percent compared to the initial production rate as soon as possible. (add about 100 thousand barrels per day)

* The initial production rate is to be agreed by the companies and Iraq on the day the contract is ratified or before, and will be calculated as the average production rate over a 30 day period.

* The firms must aim for sustained output, or ‘plateau production target’, for a period of seven years of 2.85 million barrels of crude and natural gas liquids per day.


* Conduct 3D seismic and geographical surveys.

* Drill 20 new production and 10 new injection wells.

* Rehabilitate 130 wells.

* Design and build two water re-injection plants.

* Refurbish or construct additional field gathering and processing facilities.


* The Rumaila oilfield service contract lasts for 20 years, but it can be extended.

* BP and CNPC must submit a rehabilitation plan within six months of ratifying the contract.

* The contractors must establish in Iraq a ‘normal presence’ — personnel and equipment necessary to support field operations — within six months of the rehabilitation plan being approved or the contract could be terminated.

* The companies must submit an enhanced redevelopment plan, based on knowledge gained from the field’s initial rehabilitation, within three years of the contract’s ratification.

Two other deals could be signed within the coming two weeks.

* Zubair (oilfield) is currently producing about 230,000 barrels per day (target production level of 1.125 million barrels per day within 6 years)
* West Qurna Stage 1 is producing about 280,000 barrels a day. (target production level of 1.5 to 2.1 million barrels per day in 6 years)