Expanding Iraq’s Oil Production – Issues and Impediments
Table 1: Oil Fields Awarded in the June and October 2009 Bid Rounds Field
Date Rumaila
West Qurna 1 Dec 09 West Qurna 2 Dec 09 Zubair
Majnoon
Oct 09 Dec 09
Maysan fields May 10 Halfaya Badra
Dec 09 Dec 09
Gharraf Dec 09
Qaiyarah/Najmah Dec 09 Total
Awarded Fee, US$/b Jul 09
2
1.90 1.15 2
bid
Remuneration Production Rate Plateau Rate, Incremental 2009, bid 960,000 260,000 0
1.39 2.30 1.40 5.50
1.49 5.60
200,000 45,000 70,000 5,000 0
0 0
1,540,000
Figure 1: Location of Oil Fields Awarded in the June and October 2009 Bid Rounds and Other Fields of Interest
Tawkhe Kirkuk Taq Taq
2,800,000 2,325,000 1,800,00 1,225,000 1,800,000 450,000 535,000 170,000
230,000 240,000
11,575,000
Participants
Production, bid 1,840,000 2,065,000 1,800,000 1,025,000 1,755,000 380,000 530,000 170,000
230,000 240,000
10,035,000 CNOOC = China National Offshore Oil Corporation; CNPC = China National Petroleum Corporation; KOGAS = Korea Gas Corporation; TPAO = Türkiye Petrolleri Anonim Ortakligi.
and Zubair fields have all three reservoirs stacked on top of each other, while the Majnoon, Nasiriya, Halfaya, Nahr Umr and West Qurna oilfields have only two of the main reservoirs, the Zubair Sandstone being absent or very poorly developed. The stacking of quite different reservoirs with different reservoir properties, different field development requirements and different oil properties complicates oilfield development.
Zubair Sandstone
Badra Maysan
Gharraf Nasiriya Nahr Umr Rumaila Zubair
Halfaya Majnoon
The Zubair Sandstone is an excellent reservoir in the Rumaila and Zubair fields but peters out to the north and east. It has strong aquifer support from the west and suffers from early water breakthrough in the more permeable units. The reservoir originally contained some 27% of the OIIP in the southern oilfields. Initial well rates were high – 5,000–20,000 b/d. To the end of 2010, Iraq had produced some 34 billion barrels of oil – a large part of which, 14.4 billion barrels, was from the Zubair reservoir. Water injection has been deployed for some decades to provide pressure support in the Rumaila and Zubair fields. However, with 50% of the initial reserves already produced, careful reservoir management, infill/horizontal drilling, water injection and submersible pumps or gas lift in high water cut wells will be needed to sustain and build production rates. With proper reservoir management, recovery rates of 50–65% could be achievable. The produced oil is relatively light and low in sulphur – 34–36 degrees API and 1% respectively.
access to export facilities, Kurdish oil production (excluding the disputed Kirkuk) could quite quickly reach 200,000–250,000 b/d from Taq Taq, Tawkhe, Miran West and Shaikan. This would also facilitate corporate transactions enabling the small under-financed companies that have signed oil contracts with the Kurds to sell their interests to more capable operators. The potential production increment from the Kurdish fields is small compared with that from the southern oilfields and comes at a higher net cost to Iraq, due to the more generous terms to the contractor of the Kurdish production sharing contracts compared with the service agreements signed by Baghdad.
If the ambitious production increments bid by the oil companies are simply too ambitious, then what is Iraq’s realistic production plateau and how quickly could it be reached? To answer these questions we need to look at three aspects: the nature and distribution of Iraq’s oil reservoirs; capital and logistic constraints; and the global requirement for Iraq’s oil.
High Production Rates – Not Wise
There are three main reservoirs in southern Iraq that account for nearly 90% of the OIIP; each has quite different characteristics. The Rumaila
26 Mishrif Limestone
The Mishrif is a poorer reservoir than the Zubair with highly variable reservoir properties. Flow rates are initially quite good (1,000–3,000 b/d) but decline quite quickly due to the lack of aquifer support. Sustained production of any volume requires extensive water or gas injection
If the ambitious production increments bid by the oil companies are simply too ambitious, then what is Iraq’s realistic production plateau and how quickly could it be reached?
within a year or so of start up. ExxonMobil has had difficulties raising production from the Mishrif in West Qurna as South Oil Company (SOC) had produced quite heavily from the reservoir without installing
EXPLORATION & PRODUCTION – VOLUME 9 ISSUE 1
BP (50.66%), CNPC (49.34%) ExxonMobil (80%), Shell (20%) Lukoil (85%), Statoil (15%)
Eni (35%), Occidental (25%), KOGAS (20%), ANO (20%) Shell (60%), Petronas (40%) CNOOC (85%), TPAO (15%)
CNPC (50%), Petronas (25%), Total (25%)
Gazprom (40%), TPAO (10%), KOGAS (30%), Petronas (20%)
Petronas (60%), Japex (40%) Sonangol (100%)
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