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BP Launches Drilling Tenders for Iraq's Largest Oil Field

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(Dow Jones), Feb. 17, 2010

UK oil major BP, along with Iraq's South Oil Co., has announced a tender to drill 56 wells and work on several others as part of the company's 2010 program to develop Iraq's largest oil field, Rumaila, a senior Iraqi oil official said Wednesday.

"A number of companies have been invited to bid for the drilling contract including Weatherford and Schlumberger," Abdul Mahdy al-Ameedi, head of the Iraqi oil ministry's petroleum contracts and licensing directorate, told Dow Jones Newswires.

He didn't name other companies, but separately an Iraqi oil official said Halliburton Co. and Baker Hughes Inc. were also invited.

Ameedi said that the development program of the field called for increasing production from the field by 110,000 barrels a day during this year. Rumaila, which is in southern Iraq and holds oil reserves of 17 billion barrels, is producing 1.07 million barrels a day.

BP and China National Petroleum Corp. signed a 20-year technical service contract in November last year to develop the field.

An Iraqi oil official said the BP/CNPC consortium also invited bids for purchasing rigs. He said there are already 10 rigs owned by the Iraqi Drilling Co. and Weatherford working in the field but that more rigs were needed. He gave no further details.

The BP-led consortium has pledged to almost triple production at the field to 2.85 million barrels a day. Under the deal, BP holds a 38% stake in the venture, while CNPC has 37% and Iraq's South Oil Co. the remaining 25%. The three contractors will receive a fixed fee of $2 for each additional barrel of oil produced from Rumaila.

The Rumaila deal is one of 10 deals signed with international oil companies late last year and early this year in a bid to revamp the country's war-hit oil industry and quadruple the country's production of 2.5 million barrels a day.

Copyright (c) 2010 Dow Jones & Company, Inc.

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