UPDATE: BP To Drill 80-100 New Oil Wells In Iraq's Rumaila -Exec

19th Jul 2010 18:52

(Adds comments and details starting in the fifth paragraph.) By Hassan Hafidh Of DOW JONES NEWSWIRES BAGHDAD (Dow Jones)--British oil major BP PLC (BP, BP.LN) and partners China National Petroleum Corp. (CNPC.YY) and Iraq's state-run South Oil Co. expect to issue tenders to drill between 80 and 100 wells in the immense Rumaila oil field this year and next year, a company executive said Monday. Earlier this year, BP awarded three deals valued at least $500 million to drill 49 wells as part of the program to develop Iraq's largest-producing oil field, which could become the world's second-largest. "For the next-year drilling contracts, we are expected to award them this year," the official said on the sidelines of an oil symposium concluded in Baghdad on Monday. In Rumaila, Iraq's oldest oil field that was put onstream in 1953, there are around 800 existing wells, some 500 to 600 of which are not producing and need a workover, he said. The consortium has also awarded a contract to an Iraqi local company to build a small man camp. He neither named the company nor the value of the deal. There are some 30-50 expatriates already working in Rumaila field and over 3,000 Iraqis, he said. BP and CNPC, both of which signed 20-year technical service contracts in November with Baghdad to develop Rumaila--are planning to increase production from the field by more than 100,000 barrels a day early next year, officials said. The field, in southern Iraq, is currently producing 1.07 million barrels a day. The field's proven oil reserves are estimated at 17 billion barrels. The BP-led consortium has pledged to almost triple production at the field to 2.85 million barrels a day in six to seven years from now. Under the deal, BP holds a 38% stake in the venture, while CNPC has 37% and Iraq's South Oil Co. owns the remaining 25%. The three contractors receive a fixed fee of $2 for each additional barrel of oil produced from Rumaila. The Rumaila deal is one of 11 signed with international oil companies late last year and early this year in a bid to revamp the country's war-hit oil industry and quadruple the country's production of 2.5 million barrels a day. -By Hassan Hafidh, Dow Jones Newswires; 962-799-831-831; [email protected] (END) Dow Jones Newswires July 19, 2010 13:52 ET (17:52 GMT)