BP Trying to Raise Iraq Oil Output

Source: Reuters 9/18/2011, Location: Middle East

British oil major BP remains committed to reaching its oil production targets at Iraq's huge Rumaila field and is not renegotiating contract terms, the company's chief executive Bob Dudley said. Iraq's oil minister said in June Iraq could renegotiate production deals with global oil majors and may cut the country's ambitious goal to expand capacity from below 3 million barrels per day (bpd) to 12 million barrels per day by 2017. Dudley also said in June he doubted Iraq's capacity would exceed 6 million bpd by the end of this decade, due to infrastructure problems. Production from the Rumaila oil field -- which BP is developing with China's CNPC and which has some 17 billion barrels in estimated crude reserves -- is thought to have fluctuated widely in early 2011 due to pressure problems. But BP -- one of the biggest players in the push to increase Iraqi oil production to levels to rival OPEC's top producer Saudi Arabia -- still hopes Rumaila will reach its production target of 2.85 million bpd by 2017.

"We remain committed to heading towards that plateau and we are not in any discussions around changing the terms of our contract," he said, adding that limits on exporting crude from the warn-torn country were the biggest obstacle.

"There is a lot of work to do but there is a lot of potential," he told reporters at a conference in Abu Dhabi, the capital of the United Arab Emirates.

Dudley declined to comment on whether BP was in talks with U.S. authorities over a possible out of court settlement after the latest report into the Macondo well blow-out in April 2010, which led to the death of 11 men and the biggest offshore oil spill in U.S. history, put most of the blame on BP last week.

"It wouldn't be appropriate for me to talk about settlements or non settlements we will just be ready to head to trial as we should next February," Dudley said when asked if BP was in talks with the Department of Justice over an out of court settlement.

"But we are of course cooperating with all authorities and we will be preparing for trial."

Dudley told Reuters there were no active discussions over the case with other companies that have been partly blamed for the disaster in official reports -- Transocean and Halliburton. Separately, BP has still not found a buyer for the California and Texas refineries it put on the market early this year, Dudley said.

"It always takes time to sell refineries and the process of divesting those two U.S. refineries continues and I'm sure it will take some time," he said.

"We have always said it would take well into 2012."


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