KUWAIT CITY - U.S. giant oil services firm Baker Hughes Inc. has joined U.K.-supergiant BP PLC and Schlumberger Ltd. on separate talks with Iraq to more than double output from the country's giant Kirkuk oil field in northern Iraq, an Iraqi oil industry figure said Monday.
"Baker Hughes, BP and Schlumberger have shown interest to develop Kirkuk oil fields," the person, who is familiar with the Kirkuk oil field, told Dow Jones Newswires. "Iraq is conducting preliminary talks with these three companies to examine plans to develop the field," located in the oil hub of Kirkuk province in northern Iraq.
Iraq is aiming to sign a five to 10 year deal with one of these firms to raise output from the field to 600,000 barrels a day eventually from 280,000 barrels a day currently, the source said.
"Baghdad wants to bring output from the field to 600,000 in five years," he added.
Production at Kirkuk, discovered in 1927, has declined to 280,000 barrels a day from 900,000 barrels a day in the early 2000s after years of injecting water and dumping unwanted crude and products into the field.
Kirkuk oil field was one of the fields auctioned by Baghdad in the country's first post-war oil licensing round held in 2009. A consortium led by Royal Dutch Shell PLC (RDSA) offered to boost output from the field to 825,000 barrels a day for a fee of $7.89 a barrel, but Baghdad insisted on payment of $2 a barrel.
Most of the companies didn't submit bids for the Kirkuk field as the situation in the province has been unstable since the U.S.-led war against Iraq in 2003. Kirkuk is disputed by the Kurds and the central government in Baghdad. The Kurds say Kirkuk is part of their Kurdistan and should be annexed, while Baghdad wants Kirkuk to stay under its rule.
The three companies contesting for Kirkuk oil fields are already working in southern Iraq. BP is developing the 1.3 million barrels-a-day oil field, Rumaila, Iraq's largest. BP was awarded the field during the first bidding round in 2009. Baker Hughes and Schlumberger are working in several oil fields in southern Iraq.
Copyright (c) 2012 Dow Jones & Company, Inc.
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