Gazprom Neft, the development operator of the Badra oil field in Iraq, has chosen a contractor to build the central oil gathering & treatment station following a tender.
The EPC* contract, valued at $329 million, which includes detailed design, engineering, procurement, construction, launch, testing and commissioning work, was handed to Petrofac.The contract was approved by Iraq’s Council of Ministers on 21 February.
The central oil gathering and treatment station at the Badra oil field includes three oil treatment lines with a capacity of 60,000 barrels per day, each taking approximately 18 months to construct.The commissioning of the first line is scheduled to the second half of 2013, when oil production is expected to begin at the oil field.The project will reach its full capacity of 180,000 barrels per day in the second half of 2015.A pump station, oil storage facilities, an oil metering station and other required equipment will also be constructed and installed within the project.
2012 will see Gazprom Neft continuing to hold tenders for infrastructure construction projects at the Badra oil field.This will include selecting contractors to build a 170-kilometer oil pipeline to the Garraf oil field, as well as a gas gathering & treatment station with a capacity of 1.5 billion cubic meters per year, a gas pipeline, infield pipelines and field infrastructure.
„Starting the construction of the oil gathering &treatment station and further development of oil field infrastructure is another key step in our plans for Badra. By the second half of 2013, we expect to begin producing oil at Badra with daily production reaching 170,000 barrels by 2017 or approximately 8.5 million tonnes of oil per year, as stipulated by our contract with the Government of Iraq,” said Vadim Yakovlev, First Deputy CEO of Gazprom Neft.
The Badra oil field is located in the Wasit province of eastern Iraq. Preliminary estimates indicate that geological reserves at the oil field total 3 billion barrels of oil.The oil field development contract was signed with the Government of Iraq in January 2010 following a tender in December 2009, won by a consortium of Gazprom Neft (operator), Kogas (Korea), Petronas (Malaysia) and TPAO (Turkey).
Gazprom Neft’s stake in the project is 30%, with Kogas, Petronas and TPAO holding 22.5%, 15% and 7.5% respectively.The Government of Iraq has the remaining 25% stake in the project via the Iraqi Oil Exploration Company (OEC).
Appraisal drilling at the oil field began in November 2011, facilitating preparation of a Final Oil Field Development Plan and the start of oil production.
The Badra oil field development project is scheduled to run for 20 years with the possibility of extending it for a further 5 years. Estimates put capital investments in the project at $2 billion. Under the contract, investors will have their costs reimbursed and receive compensation of $5.5 per barrel of oil equivalent produced.