Italian oil and gas company, Eni has achieved its first production milestone under the Zubair Technical Service Contract (TSC) with Iraq’s state-owned South Oil Company (SOC).
Eni, with a 32.81% share, is the lead contractor of the consortium formed for the redevelopment of the Zubair field, near Basra in southern Iraq. The other partners are the Iraqi Missan Oil Company (25%), Occidental Petroleum Corporation (Oxy, 23.44%) and Korea Gas Corporation (Kogas, 18.75%).
In a statement the company said that the Zubair field production rate has increased from approximately 183,000 bpd, the initial production rate on the TSC effective date of 18 February 2010, to a sustained rate of appreciably over 201,000 bpd, the minimum required production rate to trigger cost recovery, according to Eni.
With this increase in production, the consortium’s contract cost recovery can begin, with the group additionally earning a remuneration fee of US$2 per barrel on incremental oil production.
“This increase in production is the result of the close cooperation and coordination between the Zubair Field Operating Division (ZFOD), which has been formed by the consortium in cooperation with SOC to operate the Zubair field,” the company statement read.
ZFOD is staffed mainly by employees from South Oil Company with expert support from the consortium.
The consortium plans to increase production from the Zubair field to 1.2 million bpd, representing an increase of nearly 1 million bpd. Target production is expected to be progressively reached within the next six years and maintained for seven years thereafter, the company said.
