Things are happening at Nassiriya oil field in southern Iraq. The field, which accounts for some 4.3 billion barrels of oil reserves, has become the latest oil field to start production in recent days, albeit at a moderate pilot rate of 20,000 b/d.
Nassiriya was discovered by Iraq National Oil Co (INOC) in 1975 and remained undeveloped for more than three decades after the drilling of the first exploration well in 1978 followed by four additional appraisal wells. In 1986, INOC attempted to start production at the field and built the first gas oil separation plant but crude never managed to make it to the surface as the country was deep into war with Iran and all resources were directed towards the war effort. Several international oil companies have shown interest in the field which has the potential to produce at least 300,000 b/d from the discovered reservoirs (Mishrif, Bin Umar and Yamama) but bilateral talks with several companies including Eni of Italy in the 1990’s failed to come to fruition, mainly due to UN sanctions imposed in 1990 and that banned foreign investments in Iraq.
It was only last year that work picked up at Nassiriya field when former South Oil Co (SOC) Director General Jabbar al-Luaibi decided to use the “national effort”, a euphemism for constructing facilities by cannibalizing parts from old equipment, to start production from the three of the old five wells after rehabilitating them. That’s a big achievement for SOC, but it took close to 18 months to see the first crude flow to the surface. Nassiriya is also listed on the fast-track plan which SOC is supposed to carry out over 2009-2010 to add about 350,000 b/d from a number of new fields. According to the two-year plan, 20 new wells should be drilled in Nassiriya oil field to raise output there to about 50,000 b/d.
Nassiriya also became subject to direct negotiations earlier this year between the oil ministry and three oil companies: Eni, Repsol of Spain and Nippon of Japan. The three companies submitted proposals for a two-year contract to carry out the initial phase of the long term development of Nassiriya. Both Eni and Nippon were called on recently to submit further clarifications on their plans before further talks can be scheduled. As to when Nassiriya will be properly developed depends largely on whether Iraqi Oil Minister Hussein al-Shahristani will be able to pull together the first bid round by bringing it to conclusion at the end of the month and send a message to the world that Iraq is open for business.
Baghdad June 22, 2009
Regarding Nassiriya, I would like to add some additional historical background:
As part of the drive by the Ministry to increase the production capacities and to diversify production bases,SOC using national efforts and utilising available oil-gas separators and other equipment built a pilot plant of 20,000 b/d facilities with a pipeline connecting it to the strategic pipeline. It was inaugurated in 1989.
In fact, the studies conducted by SCOP & INOC in mid 1970s for the Export Refinery ( which is now claimed to be a new idea) were made utilising Nassiriya oil as well as Mishrif crude from Rumaila. FEED was completed then but the project, as part of INOC’s drive to export products in addition to crude had to be put on shelves upon the start of the Iraq-Iran war.
The cadre of SOC was always eager to implement the policy of national exploitation and were pioneers of many projects. It seems that the spirit remains in the hearts of those working today. They need logistics and support.