One day - One News

Email This Page

BP and Petrochina prepare multiple scenarios on Iraq giant Rumaila

BP and CNPC ramped up oil production 10% per year 

In June 2009, the international oil company BP and the China National Petroleum Company (CNPC or PetroChina) were awarded the technical services contract (TSC) for the giant Rumaila oil field in the south of Iraq, closed to the Kuwait border.

BP discovered the Rumaila oil field in 1953, but had to drop it by the nationalization under Saddam Hussein’s reign.

With estimated reserves in place of 17 billion barrels and covering 80 kilometers long by 20 kilometers wide, the giant Rumaila represents 12% of Iraq total reserves and ranks as the fourth largest crude oil field in the world.

After the war, when the Iraq Government organized the licenses rounds, BP and PetroChina won the technical services contract with a remuneration fees of $3.99 per barrel.

But after further negotiations with Iraq Government, the TSC was signed on a base of $2 per barrel remuneration fees.

At that time the Rumaila oil field production was just exceeding 1 million b/d.

From this reference of 1.066 million b/d, BP and PetroChina were given two targets:

 – Increase production by 10% the first year to trigger the payment of the $2 remuneration fees

 – Reach the plateau production of 2.8 million b/d within the next six years

To support this plan, the capital expenditure to develop Rumaila was estimated to $15 billion where the partners involved share working interests such as:

 – BP 38% is the operator

 – CNPC 37%

 – State Oil Marketing Organization (SOMO) 25%

BP to adjust production to Iraq infrastructure capacities

BP and CNPC awarded the front end engineering and design (FEED)contract and the project management services (PMS) contract to WorleyParsons mobilizing its offices in London, UAE and Iraq for execution.

In 2010, BP and CNPC awarded a $500 million contract to a consortium made of Weatherford, Schlumberger, Drilling Co. and Daqing Oil field Company Limited to proceed to a drilling campaign.

In 2012, BP and CNPC are confident to reach 1.35 million production on yearly base and to maintain a capacity of 1.4 million b/d capacity of production.

From this experience, BP and PetroChina consider to be able to increase production with additional 100,000 b/d every year on the next three years to reach 1.7 million b/d.

But this volume of 1.7 million b/d production appears to BP and PetroChina as the maximum possible within the limits of the actual infrastructures capacities to export the oil.

In this context any further capital expenditure from BP and PetroChina to reach the targeted level of 2.8 million b/d must be considered not in respect with the limits of the Rumaila project itself but according to the capabilities of the future export infrastructures to accept additional production capacities.

To move forward, BP and CNPC are working on multi-stages scenarios of Rumaila full-field development to set a new target for plateau production between 1.7 million b/d and 2.8 million b/d.

BP and CNPC will submit these scenarios to the Oil Ministry and the South Oil Company in charge of the assets in the South of Iraq in order to evaluate the consecutive investments to be made in infrastructures to be able to export the proposed production from Rumaila oil field.

From the SPE conference which took place during ADIPEC last week in Abu Dhabi, the figure of 2 million b/d was reported as a reasonable target for BP and CNPC while affordable by Iraq Authorities to finance infrastructures capital expenditure.

Once the new target approved, BP and CNPC will be able to adjust their capital expenditure to ramp up production accordingly in beginning with the replacement of the oil and gas processing facilities. 

For more information and data about oil and gas and petrochemical projects go to Project Smart Explorer

Leave a Reply

online loans . http://www.nak.org/pay/