Basrah – The Rumaila oil fields, North and South, are getting their biggest face lift in a long time and at a rate which will see the fields doubling their output within three years to some 2 million barrels per day. At a joint management committee (JMC) meeting last week, the second so far since the Rumaila service contract won by BP and CNPC in June 2009 became effective Dec. 17, several major contracts worth over $600 million were awarded.
Contracts for the drilling of 56 wells went to a Chinese company which will provide 3 rigs, Iraq Drilling Co. (IDC) jointly with Schlumberger will provide another 3 rigs and a seventh rig is to be provided by Weatherford. The companies will be mobilizing and starting work on the ground within the next six months. Timing and speed in delivery were major criteria in the selection of the winners, according to a member of the Rumaila JMC. A contract for the supply of wellheads went to top-notch in its class, Houston-based Cameron.
A contract for the supply and servicing of Electrical Submersible Pumps (ESP) was split between two companies. Baker Hughes will get to do just over 60% of the work while Saudi Al-Khorayef Petroleum Co. will carry out the remaining 40% or so. According to the fields’ maintenance plan, ESPs should be installed in 160 wells over two years, half of which will be done in 2010 alone. Al-Khorayef’s most recent expertise stems from a contract awarded by Saudi Aramco in 2006 for the installation and maintenance of 236 ESPs at the Khurais field. Still, the Iraqi contract includes a provision for cancellation if the client is not satisfied, sources at Rumaila field Operating Division tell me.
With these major contracts and other secondary ones, Rumaila’s output is set to increase by 10% this year, going up from the agreed Initial Production Rate of 1.065 million b/d to 1.2 million b/d by year end, with spending for 2010 put at $1.7 billion.
The next step will be the tendering of contracts for the drilling of 200 wells next year with additional 200 submersible pumps to be installed in the newly drilled wells. The surveillance plan of the facilities and reservoirs in North and South Rumaila is underway and the next upgrade is expected to digitize instrumentation at the central degassing station.
Over the next two years capital expenditures are expected to increase exponentially as output also goes up. In 2011, a budget of $2.5 billion will increase production by 20% adding some 300,000 b/d. By 2012, the allocated budget will continue upwards and provide for the drilling of possibly 400 new wells and adding 50% to the total output or some 500,000 b/d. By 2013, most of the work will focus on installing surface facilities as the rehabilitation work will be completed and expenditures will start moderating as the Rumaila Operating Organization – which will take over from the Rumaila Operating Division in a few months – pushes ahead towards reaching the targeted production plateau of 2.85 million b/d.