Chevron, Total seek oil deal in Iraqadmin
April 12, 2008 Filed Under: Oil and Gas
Oil giants Chevron Corp. and Total have confirmed that they are in discussions with the Iraqi Oil Ministry to increase production in an important oil field in southern Iraq.
The discussions are aimed at finalizing a two-year deal, or technical support agreement, to boost production at the West Qurna Stage 1 oil field near Iraq’s second-largest city of Basra.
Basra, about 340 miles southeast of Baghdad, has been the scene of sporadic attacks and clashes since the U.S.-led invasion in 2003. The latest fighting broke out March 25 when the government launched an operation against Shiite militants, who remain in control of several neighborhoods.
West Qurna field, located about 40 miles west of Basra, is among Iraq’s 10 “super giant” fields with its reserves estimated between 15 to 21 billion barrels, according to Iraqi Oil Ministry and Energy Information Administration.
The Ministry intends to add 100,000 barrels per day to the field’s current capacity of 180,000 bpd. Its estimated pre-2003 production capacity stood at 250,000 bpd, the ministry’s figures show.
In 1997, the Russian Lukoil oil giant struck a $3.7 billion deal with former Iraqi leader Saddam Hussein to drill at the West Qurna field. However, Saddam canceled the contract in 2002. The Russians hoped they would be able to revive it when Moscow wrote off most of Iraq’s $12.9 billion debt.
The Iraqi Oil Ministry has said it is also negotiating with Royal Dutch Shell PLC, BP PLC, ExxonMobil Corp. to increase crude production in four other fields and under the same agreement.
Iraq has the world’s third-largest oil reserves, totaling more than 115 billion barrels. Iraq’s average production for February was 2.4 million barrels per day and exports averaged 1.93 million barrels per day.