For the development of Iraq’s largest producing oil field, Rumaila, BP plc (BP) along with its partners has been awarded approximately $500 million drilling contracts. The drilling contractors are Schlumberger Ltd. (SLB) in partnership with the state-run Iraqi Drilling Company, China’s Daqing Oil Field Co. Ltd and Weatherford International Ltd. (WFT).
Rumaila field is located in Southern Iraq, one of the world’s largest oilfields. In the last year, BP and China National Petroleum Corporation (“CNPC”) have signed a 20-year technical service contract with the Iraqi government to develop the Rumaila field. Apart from BP and CNPC, there is another player in the consortium — Iraq’s South Oil Company.
Rumaila is currently producing at 1.07 million barrels of oil per day. The consortium plans to increase it to 1.23 million barrels a day by the end of this year or early next year.
BP said that a total of 70 wells will be drilled this year on Rumaila. The company has been successfully accessing substantial new resource opportunities. Following the exploration success in the Tiber discovery, a giant field in the Gulf of Mexico (GoM), this giant Iraqi field will help to underpin BP’s continued upstream growth.
Continued strong operational performance and a solid project pipeline provide strength to overall upstream operations. While management anticipates a slow and gradual economic recovery this year, we believe that BP’s growth trajectory is reinforced by this development program. We are currently Neutral on BP.
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