Gazprom Neft chooses contractor to drill oil wells in Badra

7 November 2013

Gazprom Neft has picked acontractor todrill six production wells inthe Badra field inIraq which itoperates. China’s Zhongman Petroleum and Natural Gas Group Co., Ltd (ZPEC) has won the tender.

The contract includes engineering, procurement and drilling ofwells. Two rigs will start drilling inMarch 2014.

Two wells are currently undergoing tests inBadra and athird will belaunched inearly 2014 under earlier signed contracts. The infrastructure required tomake the field operational inearly 2014 will include the Central Collection Point with atotal capacity of170,000 barrels aday. The first 60,000 barrels aday unit isdue tobelaunched within months. Apipeline tothe Garraf field, shortly tobecompleted, will deliver oil toIraq’s long-distance oil transportation system.

sup style="border-top:1px dotted #969696;padding-top:10px;font-style:italic !important; color:#58595B !important;">

REFERENCE

*EPC— engineering, procurement, construction

The Badra field islocated inthe Wassit Province inEastern Iraq with anestimated 3billion barrels ofoil inplace. The Iraqi government signed acontract for the development ofthe field inJanuary 2010 with aconsortium comprising Gazprom Neft (30%), Korea’s Kogas (22.5%), Malaysian Petronas (15%) and the Turkish TRAO (7.5%). Afurther25% ofthe project isowned bythe Iraqi government Oil Exploration Company (OEC). Gazprom Neft isthe project operator.

The $2billion Badra project has aterm of20years, with possible prolongation byanother five years. Under the contract, investors will recoup the costs incurred and will bepaid abonus of$5.5 per barrel ofthe oil equivalent.

The target output of170,000 barrels aday (about 8.5m tonnes ayear) istobereached in2017 and maintained over the following 7years.