June 11th, 2012

Halfaya Adds New Horizons



Halfaya oil field in Missan province is set to become the second green field to add significant production, after Ahdab, since Iraq’s oil ministry started awarding service contracts to international oil companies.

A ceremony to celebrate the first commercial production from Halfaya field at a rate of 70,000 barrels per day, is set for July, the director general of Missan Oil Co (MOC) Ali Muarij tells me. With this new output, which will be pumped to the export terminals in Basrah, MOC’s total output will rise to around 180,000 b/d. The Missan group of fields (Abu Ghirab, Fauqi and Buzurgan) operated by CNOOC with partner Sinochem is currently producing some 95,000 b/d and another 15,000 b/d is added from Nour and Amara fields.

Halfaya’s first commercial production comes on the heels of Ahdab which was the first field to be awarded – or re-awarded after conversion of previous contract – to China’s CNPC before the launch of bid rounds by Iraq’s oil ministry. Ahdab is currently producing some 120,000- 130,000 b/d and occasionally peaks at 135,000 b/d the chairman of the Ahdab Joint Management Committee Abdul-Aali Dabaj tells me. Some 20,000 b/d of Ahdab crude is currently trucked to feed Al-Quds power plant and the Daura refinery while the rest is being pumped to the Touba tank farm and from there to the southern export terminals.

In 2013, Halfaya oil field output is expected to grow to 200,000 b/d before it reaches the plateau of 535,000 b/d committed by operator CNPC, with partners Petronas and Total, by 2017 at the latest.

The preliminary development plan submitted after the singing of the contract targeted a first phase development which would raise output at Halfaya to 300,000 b/d by the end of 2012. The contract itself stipulated achieving first commercial production of 70,000 b/d no later than three years from the approval of the plan. However, with retrospect and as with all other PDPs submitted, those plans were too ambitious in view of the realities on the ground and the ability of the system to cater for big increases of oil production in short time spans.

Halfaya was discovered in 1976 with oil in place put at 16 billion bbls. It started limited production in 2005 which has grown to some 10,000 b/d before the award of the Halfaya contract in 2009, from wells drilled under the national effort. CNPC signed a 20-year development and production service contract in January 2010 and the contract became effective on March 1st of the same year. The remuneration fee agreed with the oil ministry under the service contract is $1.4/bbl.

The View from Baghdad