HOUSTON (Dow Jones), Oct. 22, 2009
Occidental Petroleum Corp.'s chief executive said Thursday the company expects to expand its position in Iraq "over time."
Occidental, Italy's Eni SpA and Korea Gaz Corporation belong to a consortium that was awarded a license this month for the development of the giant Zubair field in Iraq. Speaking on a conference call with analysts, CEO Ray Irani also said the Zubair field in Iraq has significant proven reserves, estimated at more than 4.2 billion barrels, and current production of 195,000 barrels of oil a day.
Irani said the development of the field will be a multi-year, multi-phased project with production expected to reach a plateau of more than 1 million barrels a day during the next six years. The company's net share of peak production from the field is expected to be about 90,000 barrels a day.
"The project will give us the opportunity to learn, evaluating each phase of the project and give us the insight to effectively evaluate future developments in Iraq," Irani said. "We hope to expand our future developments in Iraq."
But the chief executive said Occidental hasn't yet signed the agreement with the Iraqi government, and that it needs to be approved by the council of ministers and then by Iraq's parliament.
"We don't expect in any of those a problem, but you know, when you're dealing with any kind of government, particularly a place like Iraq, you can't predict when exactly it's going to happen," Irani said. But "they're [the Iraqi government] anxious to move ahead."
The head of Occidental added that he doubts there is going to be any meaningful production from Iraq reflected on Occidental's balance sheet next year, but that output would start to build in 2011.
Irani said company executives will meet next week to finish the operating agreement on Zubair.
Copyright (c) 2009 Dow Jones & Company, Inc.
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