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Iraq has shortlisted five engineering companies to bid for the first phase of a critical water-injection project that will help it boost long-term production from its southern oil fields. the director general of the state-run Basrah Oil Company told reporters Saturday.
`There are five international companies that are competing to win the project.` Ihsan Abduljabbar Ismaael said. adding that the `technical tender` will be awarded this month.
The Common Seawater Supply Project (CSSP) would ultimately take in around 5 million b d of water from the Persian Gulf. process it for field injection. and deliver it by pipeline to a half dozen fields in Basrah province.
Most of the fields in Basrah. which in addition to being the route for nearly all of Iraq`s oil exports is the country`s largest producing province. are operated by international oil companies under technical service contracts that require the government to provide water to maintain pressure.
The project has been under discussion internally and with contractors and investors for nearly a decade. It is expensive. priced at $12 billion when capacity was to be 10 million b d of water flow.
The most recent figure used publicly was 5 million b d of water in two phases. with phase one to be tendered in 2017. oil minister Jabbar al-Luaibi said last year.
Ismaael did not provide any further details. but said the tender covers a `separate project` from a multi-faceted field and infrastructure upgrade deal being negotiated with ExxonMobil. It is unclear if all or an initial aspect of the project will be removed from the Exxon project.
Exxon and China National Petroleum Corp have been in discussions with Iraq for three years over a project that includes the CSSP. expanding onshore pipelines. storage and pumping. and developing the Nahr Bin Umar and Ratawi oil fields.
Two senior officials involved in negotiations independently told S&.P Global Platts that talks continue. Last week. a senior Exxon official met with Luaibi in his office. the ministry said in a statement.
FIELD DEVELOPMENTS
Ismaael also said a final contract has not yet been signed with Petrofac and Anton Oil covering the development of the Majnoon oil field for two years. Senior officials last week said an agreement had been reached. but Ismaael said Iraq still requires the project`s costs to be reduced.
Majnoon. which produces 235.000 b d. has been operated by Shell with junior partner Petronas since 2010. A stalemate in renegotiating the contract led the consortium to hand it back to Iraq. which it will do by the end of June. Instead of contracting it out to another IOC. Basrah Oil Company will operate the field and subcontract work it doesn`t have the manpower or expertise to do. EXPORT FACILITY REPAIRS
Ismaael confirmed that this month. the Basrah oil terminal and one single point mooring will be offline briefly for repairs and maintenance. He said it ultimately will not impact loading targets.
`There are efforts. despite the stoppage and the maintenance. to keep the current exportation rate. which is 3.5 million b d.` he said.
Crude oil traders said Monday maintenance work at the single point mooring system has been deferred to May from early April. It was not immediately clear how long the rescheduled maintenance would last or the impact on the May crude loading program.
The Iraqi oil ministry had initially notified Basrah crude lifters that it would carry out maintenance work at SPM-3. one of its four SPMs in the Persian Gulf. in April. sources told S&.P Global Platts late last month.
With the initial maintenance. sources had estimated about 10 million barrels of oil would be cut from the April loading program. most of it Basrah Heavy.
Ismaael also confirmed that Iraq`s smallest terminal. Khor al-Amaya. is currently offline for repairs to prevent leaks. The terminal was processing less than 100.000 b d when averaged over a month. before it was taken offline more than two months ago.
