ExxonMobil Raises West Qurna Phase 1 Target

Source: Reuters 11/28/2010, Location: Middle East

U.S. major ExxonMobil and its partners raised their production plateau target from Iraq's West Qurna oilfield to 2.825 million barrels per day after adding new reserves to the area covered by their original development contract, Iraqi oil official said.

The original plateau target when the contract was signed in January was 2.325 million bpd in six to seven years time, but the Exxon-led consortium agreed with Iraq to add four undeveloped reservoirs, Madhi Swadi, a member of the joint management committee that runs the field, told Reuters.

"There was a discussion to develop the discovered undeveloped reservoirs and it was agreed as an addition to the original contract at production rates of 500,000 bpd," he said in an interview at West Qurna oilfield, near the southern oil hub of Basra.

Under a rehabilitation plan for the field, the consortium plans to boost output from the giant field to around 750,000 bpd in three years from between 230,000 to 240,000 bpd now, by drilling new wells, overhauling existing wells and a series of water injection projects, Swadi said.

ExxonMobil and Royal Dutch Shell won the contract to develop the 8.7-billion-barrel West Qurna Phase One field in an auction held by Iraq last year for oilfield development contracts.

During the early months of next year, Exxon and its partners plan to start a water injection project to help boost the output rate and help overcome production decline in the field, which started production in the late 1990s.

In addition to a series of small water injection projects, Exxon is leading a multibillion-dollar water injection project that should be completed by the end of 2013.

The group aims to reach its initial production rate of a 10 percent increase to about 268,000 bpd in May next year, Swadi said.

Companies start recovering costs when they hit their initial production target, which is a 10 percent increase above the agreed baseline production of 244,000 bpd.

The group's rehabilitation plan for the field includes drilling between 100 and 120 new wells through the end of 2011, which could boost production to about 300,000 bpd next year, he said.

The plan also includes drilling around 1,500 new wells to reach the final plateau target. There are 370 existing wells in the field.

"There is a tender issued for drilling new wells and we are preparing for a new tender now," he said, without adding details. Drilling activities are expected to start by early next year.

Existing infrastructure on the field can handle oil production of 550,000 bpd, Swadi said, but the plan for West Qurna includes building two to three crude processing units to meet the anticipated output increase.

The Exxon group also aims to float a tender for demining in the two next weeks, and a 3D seismic survey tender by next year.


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