Iraqi Oil Fields
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AMMAN (Dow Jones Newswires), September 29, 2008
Iraq is planning to announce this year a list of oil fields, mostly discovered but undeveloped, to be tendered in its second licensing round, Iraqi oil sources said Monday.
The fields expected to be included in second postwar bidding round are located in the southern, central and northern areas of Iraq.
Iraq's super giant fields of Majnoon, Bin Umar, Halfaya, Nassiriya and possibly West Qurna Phase II, all located in southern Iraq, and Qayiarah in the northern Mosul province are expected to be included in the second bidding round, they said.
Other fields under consideration by the ministry are Nur, al-Gharraf, Subba and Sindibad in southern Iraq. In the north, the ministry is planning to offer fields in Diyala province. In the center the fields expected to be announced for development include East Baghdad, Balad, and West Kifl, the sources said.
These fields are with estimated reserves of more than 40 billion barrels and a total production capacity of 3 million barrels a day, the sources, who are familiar with the Iraqi oil industry, told Dow Jones Newswires.
French major Total SA negotiated a production sharing contracts for Majnoon and Bin Umar in the 1990s, but no PSC was signed as Iraq was still under the then U.N. sanctions.
Majnoon's estimated reserves are 12 billion barrels and its production capacity could reach 600,000 barrels a day. The field is producing around 50,000 barrels a day. The Bin Umar field has estimated reserves of around 6.3 billion barrels.
Russian oil major Lukoil Holdings was awarded a production sharing contract to develop the West Qurna-phase II field in 1997, but operations were curtailed in 1999 because of the sanctions and in December 2002, Iraq said it unilaterally served the contract with Lukoil. The field's estimated reserves are put around 6 billion.
Many international oil companies, including those from South Korea, negotiated the super giant Halfaya field during the 1990s, but no contracts were signed. Halfaya contains estimated reserves of 4.1 billion barrels and it is believed to be able to sustain output of 250,000 barrels a day.
The Oil Ministry signed recently a $3 billion contract with China National Petroleum Corp. to develop Al Ahdab field in central Iraq. The contract was signed during Saddam Hussein's regime, but it was renegotiated and changed from PSC to a service contract.
They said contracts for the fields in the second bidding round would be similar to Al Ahdab contract and those in the first round, which was announced last June, when the ministry offered 20-year service contracts to 35 pre-qualified international oil companies to help develop six major producing fields. They first round covered six oil fields - Kirkuk and Bai Hassan in northern Iraq, Rumaila, Zubair, West Qurna-phase I and Missan in southern Iraq.
Iraq's Oil Minister Hussein al-Shahristani told al-Jazeerah television station last week that his ministry would never sign PSCs with international companies and it is offering only service contracts.
Sources added that the Oil Ministry could announce the second bidding round when ministry officials meet representatives of international oil companies at the London roadshow meeting on Oct. 13 to present them tender documents for the first round.
Iraq hopes to increase its crude oil production to 4.5 million barrels a day in five years' time and to 6 million barrels a day in 10 years' time from 2.5 million barrels a day.
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