Output At Iraq S Oil Fields Rising As Oil Deals Kick In

[suntiger]

http://online.wsj.com/article/BT-CO-20110328-716711.html

By Hassan Hafidh

Of DOW JONES NEWSWIRES

BASRA, Iraq (Dow Jones)--International oil firms that won mega-projects in southern Iraq expect to boost the country's crude oil output capacity by 600,000 barrels a day by the end of the year.

"If things go as planned we will be reaching around 2.5 million barrels a day from southern oil fields alone by the end of this year," Dhiaa Jaafar, director-general of Iraq's South Oil Co., told Dow Jones Newswires.

Jaafar was referring to supergiant oil fields such as Rumaila, Zubair and West Qurna 1, which are being developed by some of the world's largest oil firms, including BP PLC (BP), Eni SpA (E) and Exxon Mobil Corp. (XOM).

ExxonMobil and partner Royal Dutch Shell PLC (RDSA) said Monday that they have increased output from West Qurna 1 to 285,000 barrels a day from 244,000 barrels a day.

BP said in January that it had raised production at Rumaila by more than 10% above the initial level of 1.066 million barrels a day, although the Iraqi oil ministry then said the field was producing almost 20% more oil than before, or 1.275 million barrels a day.

Output at Rumaila has fluctuated in February and March due to bad weather around the export terminals in the Gulf, which at times has forced operators to cut output, Jaafar said. A leak at one of the storage facilities also affected output at Rumaila, he said. "Such problems will disappear in the next few months as we are building more deposits," he said.

SOC is developing four oil fields in the south--Tuba, Nassiriyah, Luhais and Nahr Ben Umar. The first three will be producing some 150,000 barrels a day by the end of this year, he said.

Tuba will start producing 50,000 barrels a day as of next month from 9,000 barrels a day at present, he said.

SOC is also aiming to produce 50,000 barrels a day from each at the Nassiriyah and Luhais oil fields by the end of this year. Nahr Ben Umar is expected to start first production next year, Jaafar said.

A deal to develop Nassiriyah was about to be signed last year with a consortium led by Japan's Nippon Oil Corp. (5001.TO) but talks stalled at the last moment for unreported reasons.

But Jaafar said he believed Iraq had awarded enough oil deals to international companies and that there was no need to award any more, including Nassiriyah, which holds around 6 billion barrels of proven oil reserves.

Iraq, which sits atop one of the world's largest oil reserves, signed over the last 15 months some 12 deals to develop some of the country's vast oil fields.

Earlier this month, the Iraqi oil ministry unveiled a four-year ambitious plan to boost output to 6.5 million barrels a day by the end of 2014, from 2.6 million barrels a day now.

In order to achieve the plan, the ministry's oil companies, including SOC, have begun to link oil fields with the country's export system.

Jaafar disclosed a new deal to build three large oil pipelines worth up to $500 million to link major oil fields with the deposits in Faw peninsula in southern Iraq, as a stopping place before shipping the crude for exports.

SOC is holding talks with China National Petroleum Corp., BP, Eni S.p.A (E), among others, to build the pipelines.

Jaafar said the three lines would link Rumaila North, Tuba and Nahr Ben Umar with oil deposits in the Faw peninsula, a stopping place before crude oil is shipped via the sea terminals in the Gulf. The length of the pipelines will range from 105 kilometer to 145 kilometers each, he said.

Most Iraqi oil pipelines are old and eroded.

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WOW..this is huge..thank you...