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Iraq, Eni set lower output target at oilfield

Vienna, May 30, 2013

Baghdad and a group led by Italy's Eni have agreed to cut the planned output target at Iraq's Zubair oilfield to allow this southern giant to pump more for a longer period.

Iraqi Oil Minister Abdul Kareem Luaibi said on Thursday Baghdad is lowering plateau production rates at core southern oilfields in line with a more realistic target of 9 million barrels per day (bpd), versus an original 12 million to be reached by 2017.

"Eni agreed a new plateau for that field ... the new plateau for Zubair will be 850,000 barrels a day," said Luaibi ahead of a meeting of the Organization of the Petroleum Exporting Countries. The original target was 1.2 million bpd.

Eni, U.S. Occidental Petroleum Corp and South Korea's KOGAS signed a 20-year deal with Iraq in 2010 to develop Zubair, now pumping around 270,000 bpd. The consortium is expecting to invest $18 billion in Zubair.

Iraq has signed multi-billion dollar deals with international oil companies, including Royal Dutch Shell , Exxon and BP, to develop fields in the south, where most of its crude is produced.

The country needs to boost output to strengthen its position as OPEC's second-biggest producer, but infrastructure bottlenecks and attacks on its northern export line have slowed growth.

Its oilfields are now pumping 3.1 million bpd, said Luaibi, steady versus last month.

New plateau levels are also being negotiated with BP at Rumaila and Exxon Mobil at West Qurna-1, said the oil minister.

Luaibi also said output from the southern Majnoon oilfield, operated by Shell, would start initial output of some 100,000 bpd in the coming days. Flows are expected to reach 175,000 bpd by the end of the year.

Further north, development of the Badra oilfield, near the border with Iran, faces delays after Schlumberger stopped drilling due to tough conditions, said Luaibi.

He expects the oilfield, operated by Russia's Gazprom Neft, the oil arm of Gazprom, to start up early next year.

Last year Gazprom Neft also acquired interests in two blocks in Iraqi Kurdistan despite Baghdad's opposition to international oil firms developing fields in the autonomous region. – Reuters

Tags: Iraq | Eni | Vienna | Oil output | Zubair oilfield |

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