Drilling Deep in Badra

Drilling in the Badra oil field in the east of Iraq is long and painful. The Iranians had this experience with first six wells drilled in their part of the shared oilfield in the past and now Russia’s Gazprom with its partners are laboring over the deep wells, having the same frustrating and sometimes disappointing experience as foreign operators who drilled on the other side of the border in recent years. Despite this, the field is prolific and first commercial production since its discovery in 1979 is expected next year at a rate close to 30,000 barrels per day from just three wells.

Gazprom, with partners TPAO, Petronas and Kogas, won the service contract to develop the green field of Badra in the second bidding round launched by the Iraqi oil ministry in 2009. They bid to bring the field to its plateau, a production target of 170,000 b/d within six years of singing the contract for a fee of $5/bbl. At a yield rate of 10,000 b/d per well, it is only committed to drill 17 wells in total.

On Oct. 18, the three wells drilled by Schlumberger; Bd3 (also called P08), Bd4 and Bd5, had reached depths of 2800, 4660 and 3920 respectively. The target for these wells is close to 5,000 meters. Bd5 is already in its 9th months so far. That’s a long lapse of time for one well, but not when it comes to Badra.

The first exploratory well (Bd1) drilled in 1978 flowed at the time at 6,000 b/d but was abandoned due to technical complications. Now Halliburton has got a contract for the workover on Bd1 to start in November. The second well (Bd2), which is just 4 km from the Iran border, was drilled in 1980 but was suspended before it could be tested due to the eruption of the Iran-Iraq war.

Iran on the other hand started drilling its first well on Azar, the extension of Badra in 1978  and made the discovery at a depth of 5,000 meters. Its second well drilled in 1980 was abandoned at the start of the war. In 1999 NIOC drilled another at a depth of 4940 meters. It took three years to complete. Norwegian Hydro Zagros, a subsidiary of Norsk Hydro (before its merger with Statoil) drilled the next well in 2005 at 4500 meters, and Norsk Hydro took over with another two wells in 2003 and 2004. It abandoned the first half way due to geological difficulties but forged ahead with the last one to a depth of 4700 meters. Each of those last wells took about a year and a half to drill.

The first phase of the crude processing facility in Badra is currently under construction by Petrofac on the 16 km long field in arid desert land (mostly de-mined over the past two years) overshadowed by the Iranian mountains to the east. The Petrofac contract covers three trains of 60,000 b/d capacity each. The second phase contract, worth almost $1 billion, was awarded to Samsung Engineering earlier this year. It includes gas processing facilities for 150 MMcf/d of gas, 70 Megawatts of power generation and sulfur treatment.

But the most crucial piece of work, like in most green fields currently being developed in Iraq, is the evacuation system. Badra crude is supposed to be pumped westwards through a new 165 km pipeline to be constructed, to a new depot to be built in Nassiriyah, where crude from Badra and Gharraf should be blended. The pipeline contract has been awarded to a Chinese contractor. The depot should be built by the ministry’s State Co for Oil Projects (SCOP).

Gazprom seems safe – at least for now – from the wrath of Baghdad oil officials for signing up with the Kurdistan Regional Government without the consent of the federal government. But the biggest threat to Iraq’s oil is hardly the KRG contracts, but rather the ability of the federal government to deliver on its own schedule. The Jury is still out on this and so far the performance is more than a little wanting.

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