Zubair Field to Reach Peak Output by 2017

Iraq's Zubair oilfield will reach its peak output target of 1.2 million barrels per day (bpd) by the start of 2017, a development plan set by Italian Oil Company Eni showed. A group of companies led by Eni plans to spend around $18 billion to upgrade the oilfield in southern Iraq, according to a document obtained by Reuters from Iraq's oil ministry.

Eni's partners in the consortium are Iraq's Missan Oil Company, which holds 25 percent, Occidental Petroleum Corp, with 23.44 percent, and South Korea's Korea Gas Corp, which owns 18.75 percent.

Eni, the operator of Zubair, plans to spend $2.8 billion in 2011, $4.9 billion in 2012, $3.9 billion in 2013 and nearly the same in 2014, and $3.1 billion in 2015, the document showed. The document also showed output projections for Zubair were 300,000 bpd at end-2011, 400,000 bpd at the start of 2013, 600,000 bpd at the start of 2014, 800,000 bpd in 2015 and 1 million bpd by the start of 2016.

The Zubair deal is one of a series that Baghdad has signed with foreign oil firms that it says could boost output capacity to Saudi Arabia's levels of 12 million bpd by 2017. Most analysts say 6-7 million bpd is a more realistic target. The group won the right to develop Zubair in 2009 following the country's first auction of oil contracts since the 2003 U.S.-led invasion. The field was not initially awarded in the auction, but a deal was reached in subsequent negotiations. The consortium has set a production target of 1.2 million barrels per day and will be paid a remuneration fee of $2 a barrel, according to a service contract it signed with Iraq.