BP, CNPC Submit Iraq Rumaila Oil Field Plan

BAGHDAD (Dow Jones Newswires), Jul. 22, 2009

The Iraqi Oil Ministry has received an initial development plan from BP PLC and China National Petroleum Corp., which won the rights to the country's giant Rumaila oil field in southern Iraq in June, paving the way for a final signing of the contract, Iraqi Oil Ministry sources said Wednesday.

Meantime, executives from BP and CNPC met Wednesday in Baghdad with Oil Ministry officials, and council members and lawmakers from Basra province where the field is located, a spokesman for the Oil Ministry said.

"BP and CNPC executives wanted to introduce themselves to these officials," Assem Jihad said. "They also discussed preparation to develop the Rumaila oil field." The executives are expected to hold more talks on the field Thursday, he added.

The sources said the plan was submitted last week to the ministry's Petroleum Contracts and Licensing Directorate which has set a deadline of July 15 for the winners to hand in development plans.

"The ministry wants to see if the winners are serious and they aren't gambling before signing the contract," one source said. "The plan supposed to be preliminary and doesn't go into details."

The detailed development plan for the field needs to be submitted six months after officially signing the contract, another source said. The PCLD has suggested August as the month for a final signature of the deal, the only one awarded in the first postwar licensing round held last month, out of two gas field and six oil fields.

The BP/CNPC alliance initially asked the government for a payment of $3.99 for each additional barrel of oil they can extract from the 17 billion barrel Rumaila field, but eventually accepted $2/barrel. The consortium plans to raise Rumaila's production from 1.1 million barrels of oil a day to 2.85 million barrels a day.  

Copyright (c) 2009 Dow Jones & Company, Inc.


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