Iraq Pump in Al Ahdab Oil Field





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Published on Jul 25, 2011

On July 23, the China National Petroleum Corp (CNPC) signed an oil service contract with the Iraqi government. The CNPC is the first foreign oil company to sign a deal since former leader, Saddam Hussein, was removed from power.

The Al-Ahdab oil reserve contract allows CNPC to operate in the southern, Wasit providence of the country. This deal will make Iraq the 30 country that the state-owned, Chinese company operates in, and its 80 oil and gas project partnership.

CNPC initially approached the Iraqi government under Saddam Hussein prior to the War; however, the deal fell through after the U.S. invasion in 2003. This, more recent contract, is a revised version of the prior agreement between the two governments.

CNPC began oil production at 37,000 barrels per day for the first phase of its operation, which was completed on 21 June: "The production will reach 60,000 bpd (barrels per day) next month and will then increase to reach 120,000 bpd before the end of this year," said Oil Minister Abdul-Kareem Luaibi at the launch ceremony that marked the start of oil production.

Luaibi revealed that the second phase of Al-Ahdab would start in December, taking the field's output capacity to 120,000 bpd, while the third phase, starting at the end of 2012, would increase capacity to an estimated 160,000 bpd. Luaibi went on to note that, as a recent exploratory survey showed, Al-Ahdab has 3 billion barrels of crude oil reserves, making the oil revenue from the field valued at over 40 billion US dollars.

CNPC received its first cargo of crude oil free, as payment for their help in developing Iraq's Rumaila oil field with partner BP Oil, in late May. Rumaila makes up almost half of Iraq's oil output. CNPC also helped to develop the Iraq's Halfaya oil field with French partner, Total SA Oil and Malaysian company, Petronas.

Deputy Prime Minister Hussain al-Shahristani said Iraq was currently negotiating a proposal by CNPC to increase production at the Al-Ahdab field to 200,000 bpd, he told reporters: "I have met the head of the Chinese National Oil Company and he suggested the possibility of increasing production from this oil field to 200,000 pbd and I told him that we will look into this possibility and I mentioned to him that our problem in Iraq is that wherever we go to develop a field from our fields and start additional exploratory surveys, we discover large quantities of oil, larger than what we planned to obtain,"

He added: "Now, the ministry is studying this capability and our decision will be based on the needs of Iraq from crude oil, possibilities of production and imports and capabilities of the global markets."

Iraq, which relies on oil for 95 percent of its revenues, has recently signed a series of oil contracts with international companies to try to boost its output capacity to 12 million bpd by 2017. The current rate of output is around 2.7 million bpd.

By: Nadia Idriss Mayen
Al Arabiya with Agencies

Abdul-Kareem Luaibi-Oil Minister
Hussain Al-Shahristani- Deputy Prime Minister

Majdi Alyazigi
Nasr Eltibi


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