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Iraq invites firms to drill wells for Rumaila

Baghdad, February 18, 2010

Iraq, along with British oil major BP and its Chinese partner CNPC, has invited 10 firms to drill 56 new wells in the supergiant Rumaila oilfield, an Iraqi official said.

Iraq, in desperate need for cash to rebuild its battered economy after years of war and sanctions, has struck a series of development contracts with global oil majors that could also signal a bonanza for international oil service companies.

The 10 selected firms include Halliburton Co, Schlumberger Ltd, Baker Hughes Inc and Weatherford International Ltd, as well as Chinese firms and a Turkish company. The state-owned Iraq Drilling Company was also invited to bid.

'We prefer to directly invite those companies who have worked before with the South Oil Co, BP and CNPC. We want to shorten the procedures and time needed,' Abdul-Mahdy al-Ameedi, director of the Oil Ministry's licensing office, told Reuters.

'We asked those companies to submit their bids and will study them. The best commercial tenders will be selected,' he added, declining to give an estimate for the value of the bids

BP and CNPC signed a 20-year development contract last year for Rumaila, which has 17 billion barrels of estimated crude reserves and is the workhorse of Iraq's oil industry.

It followed the Rumaila deal with nine others last year that could lift its capacity to 12 million barrels per day, rivalling top producer Saudi Arabia and offering an unprecedented workload to international oil companies.

Oilfield services leader Schlumberger declined to comment on its prospects in Iraq beyond the bullish comments from its chief executive last month along with the company's quarterly results.

Rival Halliburton said invitations to tender for services in Iraq were in process, and it was recruiting and training employees to add to the staff and equipment already there.

'Assisting in the development of Iraq's oil and gas production potential will be a significant challenge and opportunity for our company and our industry,' Halliburton spokeswoman Cathy Mann said in an emailed statement.

The company also said it expected the potential work to range from traditional product and service offerings to fully integrated well construction and production projects.

Nabors Industries Ltd, the world's largest land-drilling rig contractor, said it was in a good position to win work on Iraqi integrated projects due to its experience in Saudi Arabia, which was 'the gold standard of drilling in that part of the world.'

Nabors Chief Executive Gene Isenberg also said on Wednesday that its deal with Iraq Drilling Company would offer inroads into getting work in the country, though he was not yet banking on a near-term earnings boost for Nabors.

'There are political and security problems there, and how they'll pan out is -- nobody knows,' Isenberg said. – Reuters




Tags: BP | CNPC | Iraq | Rumaila | Oil wells |

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