Investors in Iraq’s Badra field to start seeing returns

abarrelfullabarrelfull wrote on 08 Dec 2014 12:22
Tags: gazprom-neft iraq m-east upstream

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In the 90 days up to late November 2014 around 15,000 barrels per day were released from the Badra oilfield into Iraq’s main pipeline system. This is in line with the basic terms of the field’s development contract. The Badra field is operated by Gazprom Neft.

Once the field is achieving this level of production over a 90 day period, the consortium investors will be reimbursed for costs incurred and paid a fee of USD 5.5 per barrel of oil equivalent produced.

The Iraqi State Oil Marketing Organization (SOMO) is responsible for oil sales from the Badra field. Each quarter SOMO will deliver a share of oil from the Basra export terminal on the Persian Gulf to the investor companies to reimburse their initial project costs. Each of the companies signed an agreement to this effect at the end of November. Each investor company will then be selling on their share of oil independently.

Commercial shipments of crude oil from the Badra field began three months ago. All of the infrastructure required to produce and deliver oil from the field has been developed over a period of only years. Two wells are currently in production at the field; a third well has been drilled and tested and is soon to be commissioned and a further six exploration wells are currently being drilled. The second phase of the central gathering point (DSP) is expected to be developed by the end of the year, and will increase the DSP’s capacity from 60,000 to 120,000 barrels per day.

REFERENCE

The Badra oil field is located in Wasit Province in Eastern Iraq. According to preliminary estimates, geologic reserves at the Badra field amount to 3 billion barrels of oil. The Badra oil field development project is scheduled to last 20 years with a possible 5-year extension.

The contract with the Iraqi government for development of the oil field was signed in January 2010 by a consortium of companies consisting of Gazprom Neft, KOGAS (Korea), PETRONAS (Malaysia), and TPAO (Turkey). Gazprom Neft is the project operator.

Gazprom Neft’s share in the project is 30 percent, while KOGAS has 22.5 percent, PETRONAS has 15 percent, and TPAO has 7.5 percent. The share of the Iraqi government, represented in the project by the Iraqi Oil Exploration Company (OEC), is 25 percent.


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