Rumaila oil field

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Rumaila
Fire at rumaila field.jpg
Oil fire at the Rumaila oil field in 2003
Rumaila oil field is located in Iraq
Rumaila oil field
Location of Rumaila
Country Iraq
Location Basra Governorate
Offshore/onshore onshore
Coordinates 30°09′22″N 47°24′28″E / 30.156112°N 47.407722°E / 30.156112; 47.407722Coordinates: 30°09′22″N 47°24′28″E / 30.156112°N 47.407722°E / 30.156112; 47.407722
Operator BP
Partners BP (38%),
CNPC (37%),
State Oil Marketing Organization (SOMO) (25%)
Field history
Discovery 1953
Production
Current production of oil 960,000 barrels per day (~4.8×10^7 t/a)
Estimated oil in place 17,000 million barrels (~2.3×10^9 t)
Producing formations Zubair of Hautervian & Barremian age[1]

The Rumaila oil field is a super-giant oil field[2] located in southern Iraq, approximately 20 mi (32 km) from the Kuwaiti border.[3] The dispute between Iraq and Kuwait over alleged slant-drilling in the field was one of reasons for Iraq's invasion of Kuwait in 1990.[4][5] This field was discovered by the Basrah Petroleum Company (BPC), an associate company of the Iraq Petroleum Company (IPC), in 1953.[6][7][8] Under Abd al-Karim Qasim, the oilfield was confiscated by the Iraqi government by Public Law No. 80 of 11 December 1961.[9] Since then, this massive oil field has remained under Iraqi control. The assets and rights of IPC were nationalised by Saddam Hussein in 1972, and those of BPC in 1975.[10] Rumaila is considered the third largest field in the world.[11]

The field is estimated to contain 17 billion barrels, which accounts for 12% of Iraq's oil reserves estimated at 143.1 billion barrels.[12][13][14]

Ownership[edit]

The field is owned by Iraq and subcontracted to BP and CNPC under Iraq Producing Field Technical Service Contract (PFTSC).[1][3] BP is an operator of the project with 38% while CNPC and SOMO hold 37% and 25%, respectively.[15] BP and CNPC will recover a renumerated fee of $2 per barrel in profits which will account to 15 to 20% rate of return on investment. Iraqi government and BP agreed to cut the initial bidding price per barrel from $3.99 to $2.00 in June 2009. [16] The US changed its status of forces agreement the same month, starting to depart from Iraq. ExxonMobil which also bid on servicing this field at a price $4.80 walked away due to price cutting terms by the Iraqi Government leaving BP and CNPC as winners of the contract.[17][18][19] BP expects the costs will begin to be recovered after the production will be raised by 10% from the current output. The rehabilitation and expansion project will be managed by Rumaila Field Operating Organization (ROO) which will be staffed mainly from SOC employees, a wide range of international oilfield service providers, and smaller number of experts from BP and CNPC.[15][20]

An estimated $15 billion will be spent on enhancing the operations at Rumaila over the next 20 years.[11]

Production[edit]

As of October 2012, the field produces 1,330,000 barrels per day (211,000 m3/d) making up 40% of Iraq's oil production of 2.4 million barrels per day (380,000 m3/d).[21][22] Currently ~270 production wells are operating at Rumaila. BP and CNPC intend to raise the production to 2.1 million barrels per day (330,000 m3/d) within the next six years. Once this production milestone is reached, Rumaila will become the second largest oil field in the world after the Saudi Arabian Ghawar oil field.[11] However, it is likely that the target for peak production is cut down to between 1.8-2.2 million barrels per day (bpd), the Iraqi oil ministry and oil industry sources said.[23]

Drilling contracts

In early 2010, BP subcontracted deals valued at around $500 million to Weatherford International, consortium of Schlumberger and Iraqi Drilling Co, and Daqing Oilfield Company Limited from China to drill 49 new wells at Rumaila. Weatherford is going to drill seven wells while partnership of Schlumberger and Iraqi Drilling Co, and Daqing Oil Field Co will drill 21 wells each.[24]

In February 2011, Conceptual Design, Front End Engineering Design (FEED), Minimum Work Obligations and Integrated Project Management Team (IPMT) services contract was awarded to WorleyParsons

Reservoir[edit]

Rumaila reportedly holds an estimated 17 billion barrels (2.7×109 m3) of oil; which accounts for 12% of Iraq's oil reserves, estimated at 143.1 billion barrels.[12][13][14] The oil sits approximately 2,400 m (7,900 ft) below the surface which is considered an easy target for production.[3] At current production rate of 1,330,000 barrels per day (211,000 m3/d), the reserves-to-production ratio is 35 years.

Importance[edit]

Rumalia oil field was critical in the 1990 Gulf War. Iraq, after accusing Kuwait of allegedly side-drilling under Iraqi soil, launched an attack on Kuwait on 2 August 1990.[4][5] In addition, Kuwait had been producing above treaty limits established by OPEC.[25]

During Iraq Invasion in 2003, Saddam Hussein regime laid an 18 km-long defensive minefield right across it by 100,000 mines.[26]

See also[edit]

References[edit]

  1. ^ a b Michael C Daly (2010-02-16). "BP in Rumaila". Retrieved 2010-06-24. 
  2. ^ Beydoun, Ziad (1988). The Middle East: Regional Geology and Petroleum Resources. Beaconsfield: Scientific Press Ltd. p. 179. ISBN 090136021X. 
  3. ^ a b c Master Sgt. David Bennett (2010-06-12). "Delegation sees Iraq oil field up close". US Army. Retrieved 2010-06-24. 
  4. ^ a b Thomas C. Hayes, CONFRONTATION IN THE GULF; The Oilfield Lying Below the Iraq-Kuwait Dispute, The New York Times, September 3, 1990
  5. ^ a b J. Murdico, Suzanne. Page 13, The Gulf War : War and Conflict in the Middle East. The Rosen Publishing Group (2004). p. 68. ISBN 9780823945511. 
  6. ^ Iraq Petroleum Handbook. London: IPC. 1948. p. 141. 
  7. ^ Vassiliou, Marius (2009). Historical Dictionary of the Petroleum Industry. Plymouth, UK: Scarecrow Press, Inc. p. 272. ISBN 9780810859937. 
  8. ^ Nairn, Alsharan, A.E.M., A.S. (2003). Sedimentary Basins and Petroleum Geology of the Middle East (2nd ed.). Amsterdam: Elsevier. p. 471. ISBN 0444824650. 
  9. ^ Wolfe-Hunnicut, Brandon Roy (2011). The End of the Concessionary Regime: Oil and American Power in Iraq, 1958-1972. Ph.D dissertation: Standford University. p. 70. 
  10. ^ Shwadran, Benjamin "Middle East Oil: Issues and Problems", Schenkman Publishing, 1977.
  11. ^ a b c Christopher Helman (2010-01-21). "The World's Biggest Oil Reserves. Chances are your energy needs are going to flow from one of these 10 fields in the future". Forbes. Archived from the original on 2013-01-24. Retrieved 2010-06-24. 
  12. ^ a b "Iraq - Rumaila Oil Field (HVO IRQ-10)". ukti.gov.uk. ukti.gov.uk. Retrieved 22 August 2012. 
  13. ^ a b "Iraq increases oil reserves by 24%". BBC. 4 October 2010. Retrieved 22 August 2012. 
  14. ^ a b "Iraq Lifts Oil Reserves Estimate to 143 Billion Barrels, Overtakes Iran". Bloomberg. 4 October 2010. Retrieved 22 August 2012. 
  15. ^ a b "BP and CNPC to Develop Iraq's Super-Giant Rumaila Field" (Press release). BP. 2009-11-03. Retrieved 2010-06-24. 
  16. ^ {cite news | title = US Iraq Status of Forces Agreement | url=http://en.wikipedia.org/wiki/U.S.%E2%80%93Iraq_Status_of_Forces_Agreement}
  17. ^ Stanley Reed (2010-06-30). "Iraq's Oil-Field Auction Falls Short". Bloomberg Businessweek. Retrieved 2010-06-24. 
  18. ^ "The $40 Billion Opportunity In Iraq". Business Insider. 2010-04-26. Retrieved 2010-06-24. 
  19. ^ DiPaola, Anthony; Gismatullin, Eduard (2009-07-28). "BP Says Return on Iraq’s Rumaila to Compare With World Fields". Bloomberg. Retrieved 2010-06-24. 
  20. ^ "BP, CNPC sign contract to develop Iraq's Rumaila field". RIA Novosti. 2009-11-03. Retrieved 2010-06-24. 
  21. ^ Ahmed Rasheed (2009-10-09). "Iraq signs deal with BP, CNPC for Rumaila field". Reuters. Retrieved 2010-06-24. 
  22. ^ "Top Ten Highest Producing Oil Fields". Oil Patch Asia. Retrieved 7 January 2014. 
  23. ^ http://en-maktoob.news.yahoo.com/bp-proposes-cutting-iraqs-rumaila-oilfield-output-target-121343174--business.html
  24. ^ Hassan Hafidh (2010-03-30). "BP Awards 3 Drilling Deals for Iraq's Rumaila Field". Rigzone. Retrieved 2010-06-24. 
  25. ^ http://www.nytimes.com/1990/09/03/world/confrontation-in-the-gulf-the-oilfield-lying-below-the-iraq-kuwait-dispute.html?pagewanted=2&src=pm
  26. ^ Chazan, Guy (December 16, 2012). "Iraq – back in the flow". Financial Times. Retrieved 7 January 2013. 

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