New well brought into production at Badra field
A fifth well (P-04) has been brought into production at the Badra field, Iraq, operator of which is Gazprom Neft. While the well is currently in testing mode, potential output is estimated at 10,000 barrels per day. Start-up of production at the P-04 well has seen total oil production at the field increase by one quarter, with a total five wells now producing 35,000 barrels per day. Production volumes at the Badra field have more than doubled since early 2015.
Development of the field is ongoing, with drilling of a further well (P-13) nearing completion, with anticipated production of 10,000 barrels per day. In addition to this, drilling of two other wells (P-09 and P-15) is also ongoing, under a contract previously concluded with Chinese company ZPEC.
Drilling of two production wells was also completed in 2015 at the Badra project, with drilling time (on pioneer wells) reduced by an average 148 days, and average non-productive time, moreover, reduced by 83 percent, from 225 to 40 days. Achieving this result has been made possible thanks to analysis of drilling outcomes, a new approach to contracting strategy, and detailed evaluation of major risks.
Vadim Yakovlev, First Deputy CEO, Gazprom Neft, commented: “By applying cutting-edge technologies and extending operational efficiencies the company has been able to consistently increase production at the Badra field. Consortium participants began receiving reimbursement for the costs incurred in developing the field last year, and Gazprom Neft expects to receive its second consignment of oil (as payment for its investment) in August.”
The Badra oilfield is located in the Wasit Province, Eastern Iraq. Preliminary estimates indicate total oil in place at the Badra field to be in the order of three billion barrels. The contract for development of the field is expected to run for 20 years, with potential for extension by a further five. Commercial production commenced in 2014.
Following repayment of investors’ costs, the terms of the contract with the Government of Iraq envisage compensation in the order of $5.50 per barrel of oil: this contract having been signed with the Government of Iraq in January 2010, on behalf of a consortium comprising Gazprom Neft (operator), KOGAS (Korea), PETRONAS (Malaysia), and TPAO (Turkey). Gazprom Neft’s interest in the project is 30 percent, with KOGAS, PETRONAS and TPAO holding 22.5 percent, 15 percent, and 7.5 percent, respectively. The Iraqi government’s holding is represented by the Iraqi Oil Exploration Company (OEC), which holds 25 percent.