The consortium, led by Eni (32.81%) with partners Oxy (23.44%), KOGAS (18.75%) and the Missan Oil (25%), plans to increase production from the Zubair field to 1.2 million barrels of oil a day, representing more than one million barrels of oil per day. Target production is expected to be reached within the next six years and maintained for seven years thereafter.
The consortium will earn $2 per barrel on the incremental oil production once production has been raised by 10% from its current level of approximately 200,000 barrels of oil per day and will recover its expenditures through a cost recovery mechanism. The consortium plans to invest approximately $20bn over the life of 20 year contract, which has possible extension to 25 years.
The Zubair field operating division will manage the rehabilitation and expansion project, which will be staffed by employees from South Oil and expert support from the consortium, with the intent to develop a self-sustained organization.
Paolo Scaroni, CEO of Eni, said: “The signing of the Zubair contract comes as a result of Eni’s commitment to becoming a long-term partner for the development of Iraq’s hydrocarbon industry. Our experience in similar environments, the financial and technological strength of our consortium and the deep knowledge of our partner SOC, undoubtedly constitute the building blocks of a successful venture.”
Ray Irani, chairman and CEO of Occidental Petroleum, said: “Oxy is a very active and cooperative partner in many successful projects across the Middle East, and we expect similar success in Iraq. We are pleased to join with the Iraqi government, the Iraqi people and our consortium partners in developing one of the world’s great oilfields.”
