Eni, Occidental Petroleum Corporation (Oxy) and Korea Gas Corporation (KOGAS) announced today that they have achieved and sustained a 10% increase in oil production at the Zubair field, near Basra in southern Iraq.
Iraq’s oil field suffered from chronic under-investment under the previous regime and trade sanctions prevented any foreign investment in the country’s oil fields and installations. With the relative stability and security that the country has enjoyed over the last year, the oil fields are now being re-invigorated by investment and new technology.
Production from the Zubair field has grown to more than 200,000 barrels of oil per day from the approximately 183,000 barrels of oil a day produced when the consortium started field operations in the first quarter of 2010.
The consortium, led by Eni (32.81%) with partners Oxy (23.44%), KOGAS (18.75%) and the Missan Oil Company (25%), signed a technical service contract in late January to redevelop the Zubair field with Iraq's state-owned South Oil Company (SOC) and Missan Oil Company as State Partner.
With the successful 10% increase in initial production, the consortium’s contract cost recovery mechanism commences, with the group additionally earning US$ 2 per barrel on the incremental oil production.
The consortium plans to increase production progressively over the next six years to 1.2 million bpd of oil (an increase of 1 million bpd) and maintain it at this level for seven years.
“Oxy’s success in Iraq is a direct result of an outstanding partnership with the Iraqi government and our consortium partners in developing one of the world’s great oilfields,” said Dr. Ray R. Irani, Chairman and Chief Executive Officer of Occidental Petroleum.
The redevelopment of the Zubair field, one of the largest discovered fields in the world, will support Iraq in becoming a major player in global oil markets. It also will foster social and economic development at a regional and national level, by providing training and development opportunities for the thousands of Iraqi workers of Zubair and by promoting much-needed economic stimulus.