Iraq Drilling Co (IDC) is back in force and seems on the way to turn itself into a success story by teaming up with the big ones. After the short setback following the failed joint venture with Mesopotamia Petroleum, it has finally found the magic formula to play the leading role in the gigantic drilling effort that will take place across the Iraqi oil fields over the next few years.
In the first drilling tender launched earlier this year for drilling in Rumaila oil field, IDC bid jointly with Schlumberger, the world’s largest oilfield services provider and together they won a contract to drill 21 new wells and carry out workover jobs on 23 wells. IDC will supply three of its 22 new rigs and cheap manpower. Schlumberger will contribute the techniques and the management. The added value for IDC is that its staff will get trained to Schlumberger’s standards.
In the Majnoon tender, IDC will bid again with two US service and drilling companies to drill 15 vertical and directional wells using another three of its rigs. If awarded the contract, it intends to start drilling in the first quarter of next year.
In Zubair where it already has four rigs drilling 23 wells based on an old direct award contract with SOC, it will also bid with another partner to drill some of the 46 wells and 85 workover jobs that will be tendered. Its four workover rigs are currently executing 25 jobs on old wells in Zubair.
The same formula will apply for any bids that will come up in the next few weeks and months. West-Qurna-1, where it has already drilled two wells this year and is holding discussions to drill eight more, it’s eying a tender for workover jobs in more than 250 wells to be announced later this year. It has set aside one rig to use in West-Qurna-2 if it wins a tender there and another for Najmah and Qayarah fields in the north when the time comes to bid. It has already bid for 5 appraisal wells in Gharraf fields.
And as expected, there is no lack of suitors now that IDC has found its feet. IDC officials say memoranda of understanding have already been signed with a number of oilfield services and drilling companies to bid together in all tenders to come up.
On its own, IDC is expected to drill a total of 70 wells in 2010 under the “national effort program”.
Not surprisingly, IDC is the envy of other public companies under the auspices of the oil ministry, especially Oil Exploration Co (OEC) and State Co for Oil Projects (SCOP). The huge fields’ development work required which includes exploration work in the green fields awarded and the massive number of facilities and pipelines to build means, in principle, there is no lack of work for either. However, years of sanctions and underinvestment had their toll on the two companies and none is up to scratch when it comes to competing with Western and Asian, or even Arab field services companies.
Addressing a Baghdad seminar on July 18 at his ministry where international oil companies and government institutions came together to discuss problem solving linked to the implementation of the oil contracts, Oil Minister Hussein al-Shahristani called for the execution of contracts according to commitments and timelines “at the lowest cost possible”. The prime minister’s Chief Advisor Thamir al-Ghadban insisted in his turn on giving priority to “building Iraq’s capabilities and maximizing the national content” in the execution of the contracts. Both OEC and SCOP offer the right ingredients to conduct seismic surveys and build pipelines, tank farms and pumping stations at lower cost than foreign services companies and they are the right candidates to build a capable Iraqi oil sector, but not without help from above. First they need a big boost similar to the one IDC received to upgrade their assets. Then, they need to be freed of all archaic laws and regulations which keep them hostages to their past.