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IRAQI GOVT DECISION

BP mulls 1m bpd output target cut at Iraq oilfield

St Petersburg, June 22, 2013

Oil major BP is weighing cuts of more than 1 million barrels per day in targetted peak output at Iraq's most prolific oilfield, Rumaila, its chief executive said, as Baghdad aims to pump at lower rates so resources will last longer.
 
"It is something the government has asked us to do," Bob Dudley said in the Russian city of St. Petersburg on the sidelines of the Rosneft annual general meeting.
 
Baghdad is lowering plateau production rates at core southern oilfields, including Rumaila, in line with a more realistic target of 9 million barrels per day, versus an original 12 million to be reached by 2017.
 
But Iraq and Western oil experts say reaching even the 9 million rate will be a stretch given infrastructure constraints.
 
One set of scenarios for Rumaila ranges from 1.7 million-2.4 million barrels per day (bpd), while the current target of 2.85 million bpd is still "mentioned" but the peaks would differ over time in different scenarios, Dudley said.
 
A Rumaila oilfield executive said last month it would produce 1.45 million bpd at the end of this year from current rates of around 1.4 million.
 
BP has been in talks about the reduction at Rumaila since last year. In December, oil ministry and industry sources said BP was close to reaching a deal to cut Rumaila's target to between 1.8 million and 2.2 million bpd.
 
Rumaila, which BP operates with China National Petroleum Corp. (CNPC), has estimated reserves of around 17 billion barrels and produces the largest single contribution to Iraq's total output.
 
Dudley took a seat on Rosneft's board on Thursday after BP's purchase of a 20 percent stake in the state owned Russian oil producer, which holds the world's largest crude oil reserves among listed companies.
 
Iraq, which in 2009 awarded a series of service contracts with international companies to tap its oilfields, is aiming to produce 3.4 million bpd by the end of this year, up from around 3.1 million bpd now.
 
"I think it's doable," Dudley said, adding that hitting next year's higher output target would depend on infrastructure developments. Iraq wants to produce 4.5 million bpd by the end of 2014.
 
The ministry of oil has already agreed lower production targets for Lukoil at West Qurna-2 and Eni at Zubair. Negotiations are continuing with Royal Dutch Shell at Majnoon and Exxon at West Qurna-1.
 
BP is boosting spending at Rumaila to $2.85 billion this year, under a stepped-up drilling programme, after expenditure of $1.9 billion last year.-Reuters



Tags: BP | Oil | Iraq |

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