Iraq's cabinet has approved an USD 843 million service contract with US oilfield services company Weatherford to build crude production units in the Zubair oilfield.

Italy’s Eni, US based Occidental Petroleum Corporation and South Korea’s Kogas had signed 20 year deal with Iraq to develop Zubair. They set an eventual output target of 1.2 million barrels per day by 2017.

The cabinet said that under the contract, Weatherford is to construct 6 crude production units, each with the capacity to process 50,000 barrels per day. The duration of the contract is 18 months. Zubair is currently producing around 254,000 barrels per day and output is expected to increase by 100,000 barrels per day by the end of 2012.

Iraq has awarded massive oilfield development contracts to majors such as Royal Dutch Shell and BP with the ambitious target of expanding its oil production capacity to 12 million barrels per day by 2017. Most analysts see 6 million tonne to 7 million barrels per day as more realistic.

Current export infrastructure is outdated and lacks the capacity to handle Iraq's future expected output raise. Iraq is currently exporting an average of 2.4 million barrels per day and expects to export 2.5 million barrels per day in 2012.




Reuters