Iraq is set to witness a few firsts when it comes to how oil fields have been and are being developed around the world. After all, at no time in the history of the industry has so many oil fields of this size been developed all at once in such a short time span. One of the major firsts will no doubt be the Common Seawater Supply Facility (CSSF) which will aim to process up to 15 million barrels per day of raw seawater from the Mideast Gulf in order to provide some 12 million b/d of treated water to be injected in fields in southern Iraq as they are developed. That makes it the biggest such project in the world.
The challenges to bring such a venture into being are multiple. First, the concept selection has to be right especially that it will serve most of the fields in southern Iraq for the long run. All fields being developed by international oil companies in the area, starting with the producing fields of Rumaila, West Qurna (1+2), Zubair, as well as Majnoon, Halfaya, Gharraf and Missan will require water injection to increase recovery at some stage. It’s crucial that the system to be built with all its components from the intake part to the treatment facilities to the pumps and pipelines until the delivery part cater for the evolving needs of all at different stages.
Second, the commercial framework based on which the international oil companies will provide the investment needed to build such a facility will have to insure those investments are worth making. For Iraq, where the lack of an adequate water injection system for years has pushed some of its field into early decline, and depending on the final commercial framework to be adopted, it’s a matter of fair cost and flexible payment terms that do not turn the field development effort into a burden, especially in the early years before the big proceeds start coming in.
Third, the regulatory and legal frameworks in Iraq are either outdated or in the process of being updated. The list of approvals to obtain could be very long and taxing.
Finally, those affiliated to the project which basically means all the international oil companies with contracts to develop oil fields in the south, will have divergent requirements according to different timelines. Managing those needs on the long term is a huge task of coordination that would require inherent flexibilities in the system.
The technical study defining the concept to be used should be completed by September. ExxonMobil has taken the lead role – whether by choice or lack of – chairing the overall committee that includes the Iraqi partners such as South Oil Co and the ministry of oil as well as representatives of all the international oil companies.
The project is a test case for Iraq and could serve as a template for other much needed infrastructure including the crucial network of export pipelines required once crude oil production doubles from the current 2.5 million b/d and then triples over the next few years.