Iraq Invites 15 International Oil Companies to Drill 50 Wells in the South

Apr 03, 2007 (Dow Jones Newswires)

Iraq has invited 15 international oil companies to drill 50 new oil wells in southern oil fields which would increase the country's output by 70,000 barrels a day, an Iraqi Oil Ministry spokesman said Tuesday.

"The Oil Ministry has instructed the South Oil Company to invite 15 specialized and well known international oil companies to take part in a tender to drill some 50 oil wells in Maysan province," the spokesman said in a statement, a copy of which obtained by Dow Jones Newswires.

The South Oil Company has set a period of two months to receive bids from these companies, he added.

The statement said that these new oil wells are located in the Fakka, Bazerkan, Abu Ghareb, Halfaya and Amarah oil fields.

The spokesman didn't say how much drilling of these wells would cost the Iraqi government. But he said that the companies would drill them in return of certain amount of money and would deliver them to the South Oil Company in a matter of six to seven months after the start of work.

The spokesman said that the ministry is also intending to drill another 50 oil wells in Basra province in southern Iraq.

He gave no further details.

Iraq has the world's third largest proven oil reserves but is struggling to maintain its energy sector. It depends almost entirely on its southern oil terminals for exports because sabotage and security problems have severely disrupted oil production in the north.

Iraq's oil exports are currently around 1.5 million barrels a day, well below its potential because of a lack of investment, sabotage and years of neglect under the U.N.-imposed sanctions before the U.S.-led invasion of March 2003.

The Iraqi government is aiming to hit a production target of 4.5 million barrels a day within the next four to five years.

The government has passed oil and gas law that regulates foreign investment but it has yet to be endorsed by the country's parliament.

Copyright (c) 2007 Dow Jones & Company, Inc.