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BP and PetroChina to pre-qualify bidders for Iraq Rumaila giant oil field

BP and CNPC prepare Rumaila processing plant bids

The UK super major BP and its partners, China National Oil Corporation (CNPC or PetroChina) and the Iraq state-owned State Oil Marketing Organization (SOMO) are currently reviewing the long list of the potential bidders for the Rumaila oil processing plants projects near Basra in the south of Iraq.

In planning series of giant crude oil processing plants with minimum capacity of 300,000 barrels per day (b/d) to support the development of one of the largest crude oil field in the world, BP and its partners motivated the application of more than 20 world scale engineering companies and contractors.

BP_Rumaila_Field_Development_mapWith recoverable reserves estimated to 20 billion barrels, Rumaila ended it up in the hands of BP and PetroChina during the license round organized by Baghdad Government in 2009.

As BP had discovered the Rumaila field in 1953 before leaving it to Saddam Hussein, BP had accumulated a unique expertise and deep understanding of Rumaila reservoir.

Therefore during the reverse auction of 2009 license round, BP could take the risk to accept a technical services contract (TSC) from Iraq Government with a remuneration fee of only $2 per barrel despite the massive amount of $15 billion capital expenditure to be engaged in Rumaila full field development project.

 Together with PetroChina and SOMO, BP is sharing the working interest in such a way:

 – BP 38% is the operator

 – CNPC 37%

 – SOMO 25%

During the first years BP and its partners gave the priority to the restoration of the production in increasing the number of wells and deploying of the techniques for enhanced oil recovery (EOR) with water flood and gas re-injection.

First Rumaila Processing Plant to be awarded in 2014

In Rumaila as in the other giant oil fields awarded during the license rounds, the principle of the remuneration fee of the technical services contracts has reached the limit of acceptance by the foreign companies.

In addition Iraq met some delays to implement its program of infrastructures, especially to export the produced crude oil.

A worker adjusts the valve of an oil pipe in a south Rumaila oil field, south of BasraTherefore all the companies took the opportunity to re-negotiate with Baghdad their contractual targets of plateau production.

After increasing by 10% per year the 2009 production of 1 million b/d, BP and its partners are trying to reduce their contractual target plateau production from the current 2.8 million b/d down to 2.1 million b/d by 2019.

To support this production BP and CNPC are planning to build seven processing facilities to cover  the 80 kilometers long and 20 kilometers wide field.

With a capacity of 450,000 b/d, the first crude oil processing plant should come for tender in 2014.

 In parallel to the first crude oil processing plant, BP and its partners, PetroChina and SOMO, are planning to call for tender a pumping stations package.

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

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