Thursday, Oct 20, 2011

(This item was originally published on Wednesday.) 


 
   By Hassan Hafidh 
   Of DOW JONES NEWSWIRES

ISTANBUL (Dow Jones)--U.S. giant oil services company, Weatherford International Ltd. (WFT), has won a deal to build early production facilities at Iraq's untapped Garraf oil field in southern Iraq, a former Iraqi oil ministry official said Wednesday.

Adnan Galay, who retired as chairman of the field's joint management committee a few weeks ago, declined to give the value of the deal. However, contracting sources attending an Iraqi energy meeting in Istanbul said the contract is worth about $200 million.

Galay said that Lakeshore TolTest Corp. will be a subcontractor to the project.

Weatherford was awarded the contract by the operator of the field Malaysian Petronas and its partners, Japan Petroleum Exploration Co. (1662.TO), known as Japex, and Iraq's state South Oil Co.

Weatherford was selected over three rival bidders--Petrofac with JGC, Saipem and Punj Lloyd, the sources said.

The giant oil services company earlier this year won a deal worth $52 million to drill 11 new wells in Garraf, located halfway between the southern cities of Karbala and Nasiriya in Thi Qar governorate. The field was discovered during the 1980s by the then Iraqi oil ministry.

Output from the field is expected to hit 50,000 barrels a day next year, 60,000 barrels a day in 2013 and 100,000 barrels a day in 2014, Galay said.

Petronas, with a 45% stake against its Japanese partner's 30% and Iraq's state South Oil Co. 25%, has been considering bid proposals since the late summer of 2010.

Garraf has an eventual output target of 230,000 barrels a day, although the Petronas-Japex partnership may increase production beyond that level, officials said.

"Three wells have been drilled to date, and testing oil proves that gravity ranges from 24 to 36 degrees API in the two reservoirs of the field," Galay said.

The Garraf early production work involves construction of a degasing facility with two trains of 50,000 barrels a day each, as well as storage tanks and infrastructure.

Weatherford earlier carried out the front-end engineering and design study at Garraf. Iraq is now producing about 2.9 million barrels a day and that would go up to 3 million barrels a day by the end of this month, according to Thamer Ghadhban, the top energy advisor to Iraq's Prime Minister Nouri al-Maliki.

The Petronas-Japex consortium was awarded Garraf oil field, with estimated proven oil reserves of 1 billion barrels, during Iraq's second bid round held in December 2009.

-By Hassan Hafidh; Dow Jones Newswires; +962 799 831 831; hassan.hafidh@dowjones.com

(END) Dow Jones Newswires

20-10-11 0353GMT