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Iraq’s oil minister has announced that the country has awarded the contract to develop super giant 17 billion barrel Rumaila field to a consortium led by British supermajor BP.
Hussain al-Shahristani said that both consortia’s bidding for the field, which were led by BP and US oil giant ExxonMobil had initially offered to develop Rumaila, which lies on the border with Kuwait in the south of Iraq, at a cost per barrel higher than the maximum limit of US$2 per barrel that had been imposed by Baghdad.
After sending both interested parties away for further discussions, the BP consortium, which includes China National Petroleum Corp (CMPC), decided to accept Iraq’s offer while the ExxonMobil led group, including Malaysia’s Petronas, decided to decline it.
“We asked each of the companies to accept and BP and CNPC accepted the ministry’s figure and for that reason their bid is accepted,” Shahristani is quoted by Reuters as saying.
In a statement emailed to ArabianOilandGas.com a BP spokesman said: “BP and its partner China National Petroleum Corporation (CNPC ) are very pleased to have participated in the transparent and efficient process today.”
“We are looking forward to the next step towards finalising the service contract to increase production of the Rumaila field. We will give further information upon finalisation of the contract,” the spokesman added. Â
The Rumaila field lies along Iraq’s border with Kuwait and has a current output of between 950,000-980,000 barrels per day (bpd). The target output for the field is 1.75 million bpd.
The signature bonus the consortium will have to pay is US$500 million as well as guarantee another $300 million in development expenditure for the field. In return the consortium are rewarded with a 20-year service contracts that pays them a fixed price per barrel for production in excess of a minimum target.
Shahristani also announced that there were no bidders for the 3.3 trillion cubic feet (tcf) Mansuriya gas field in the Diyala province east of Baghdad.
Day One
Bai Hassan 14:00, Zubair 16:00
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Day Two
Missan Fields 09:00, Kirkuk 11:00, Akkas 14:00, West Qurna-1 16:00
Full list of Iraq oil contract bidders BHP Billiton, Eni, LUKoil, Occidental Petroleum, Sinochem, BP, ExxonMobil, Maersk Oil, ONGC, Sinopec, Chevron, Hess Corp., Marathon, PT Pertamina, StatoilHydro, CNOOC, INPEX Corp., Mitsubishi, Petronas, Total, CNPC, JAPEX, Nexen, Repsol-YPF, Turkish Petroleum Corp. (TPAO), ConocoPhillips, Gazprom Neft, Nippon Oil, Shell, Woodside Petroleum, Edison, Korea Gas Corp. (KOGAS)     Â
Source: IHS Global Insight, Iraqi Oil Ministry, media
