8 July 2005
Iraq’s South Oil Co. (SOC) is launching a handful of pilot production projects at oil fields in southern Iraq, in an attempt to compensate for declines at its large producing fields, according to local industry sources. The big-field problems have been exacerbated by a lack of funds for drilling new wells and working over existing wells, as well as delays in implementing water injection projects.
The major fields of North and South Rumaila, Zubair and West Qurna currently account for 70% of Iraq’s southern oil production, estimated at 1.7 million-1.8 million barrels per day, of which an average 1.45 million b/d is exported through the southern terminals.
This compares with production capacity of 650,000-750,000 in the north but effective output there of just under 400,000 b/d, due to sabotage paralyzing pipeline exports.
Iraqi sources said security arrangements organized by SOC, which rely largely on the large tribes of southern Iraq, are the major factor in securing almost uninterrupted production operations from the southern fields. However, this security is largely concentrated at producing fields closer to the main city of Basrah.
The sources said production levels at the large southern fields are declining by 10% per year as a result of limited drilling and workover activities, while the water cut is climbing toward 25% and could reach up to 50% at certain fields.
The new pilot production projects focus on fields where initial output had started in previous years, but was halted as the result of the US-led war of 2003. This year a pilot scheme was restarted at the Amara oil field, where 7,000 b/d is now being pumped to a local 10,000 b/d refinery producing low-quality gas oil. A new well is being drilled in Amara, which should raise output by 3,000 b/d later this year, the sources said. Before the war, Amara was producing 10,000 b/d.
Another old pilot production project is being pursued at the Majnoon oil field, which was producing 50,000 b/d before the war. Output was restored last year to these levels, and plans aim at raising production to 100,000 b/d by next year. Iraqi press reports quoted SOC Director General Jabbar al-Luaiby this week as confirming that SOC had received new equipment, which it planned to install soon Majnoon to double production capacity.
The three oil fields of the Missan area, close to the border with Iran — Buzurghan, Fauqi and Abu Ghirab — were producing 160,000 b/d until the first quarter of 2003. Current production is put at 100,000 b/d, and there are plans to raise it to 120,000 next year. Security in the area is considered better than in Basrah, mainly due to the effective control of the area by Shiite groups belonging to the Fadhilah Party, considered close to firebrand cleric Muqtada al-Sadr.
Iraqi industry sources said a launch of pilot production is also planned at the Ratawi oil field, with a view to starting production at 20,000 b/d, compared with capacity of almost 50,000 b/d before the war. Similar plans for the Halfaya and Tuba fields aim at starting output at 10,000 b/d each.
The possible award of an engineering, procurement and construction contract to install surface facilities at the twin Suba-Luhais fields would increase production capacity there to 150,000 b/d in two phases.
In northern Iraq, production from the Bai Hassan field has been almost restored to prewar capacity of 130,000 b/d, but output from Jambur, which reached 80,000 b/d before the war, is currently limited to 25,000 b/d. Two small northern fields close to the Iraq-Syria border, Ein Zalah and Sfaya, are producing slightly under 10,000 b/d combined, which is exported across the border to Syria in exchange for electricity and some oil products, the sources said. The 30,000 b/d Khabbaz oil field remains shut in.
Iraq’s oil ministry awarded a contract to install surface facilities at the Khurmala Dome at the Kirkuk field in December to a consortium of Turkey’s Avrasya, Iraq’s Kar Group and UK engineer Dynamic Processing Solutions. The aim is to raise production capacity there to 100,000 b/d from a current 35,000 b/d. Production capacity from the other Kirkuk domes is currently put at 250,000 b/d.
Canada’s OGI won a similar contract in April to install surface facilities at the Himrin field in the north, with a view to installing capacity of 100,000 b/d.
By Ruba Husari, London
(Published in International Oil Daily Jul. 8, 2005)