ExxonMobil, BP, Eni Investing $100B to Develop 3 Iraqi Fields-Official

ISTANBUL (Dow Jones Newswires), Oct. 19, 2011

ExxonMobil, BP and Italy's Eni will spend around $100 billion to upgrade three oilfields in southern Iraq, the top energy advisor to the Iraqi Prime Minister said Wednesday.

Thamer Ghadhban said some $50 billion would be spent to upgrade the supergiant West Qurna Phase 1 oilfield which is being developed by Exxon Mobil. The remaining $50 billion will be spent by BP and Eni to upgrade the Rumaila and Zubair oil fields respectively, he added.

"We have $100 billion for the three fields," Ghadhban told reporters on the sidelines of an Iraqi energy conference in Istanbul organized by the London-based CWC Group. "The bulk (of the finance) is for West Qurna 1 because the Rumaila and Zubair fields were well advanced in terms of development, such as number of wells, oilfield facilities, other infrastructure, while West Qurna phase 1 needs more," he said.

The three fields are pumping now around 2 million barrels a day, which is the bulk of Iraq's total oil output, currently standing at 2.9 million barrels a day.

According to the deals signed with these companies two years ago, production from these three fields should reach at least 6.8 million barrels a day in 2017.

The 20-year contracts stipulate that international companies should spend money developing these fields, then would start receiving costs and remuneration fees per extra produced barrels when they reached 10% of baseline output increase.

A BP spokesman said it was too early to forecast the exact size of the group's investment in Rumaila.

"We're working with our partners and the Iraqi government on a detailed field development plan. Obviously, our plan is to invest enough to reach the production targets agreed in our contract," said the spokesman.

Copyright (c) 2011 Dow Jones & Company, Inc.

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