Gazprom Neft selects contractor for drilling in Iraq

Press-release

Following a tender, Gazprom Neft has chosen Schlumberger to drill the first wells in the Badra oil deposit development project in Iraq. Upon signing the contract will last for three-years. On 9 June, Gazprom Neft, as the project operator, obtained approval to sign an agreement with Schlumberger from Iraq’s state-owned North Oil Company (NOC), part of the Iraqi Oil Ministry.

The contract with Schlumberger will involve three drilling rigs, with the drilling of the first appraisal and development wells expected to be completed in early 2012. A total of 11 wells are to be drilled over the three-year period, including one exploratory and three appraisal wells, which will later be converted into operating well stock.

“The commencement of drilling at the Badra oil deposit will be yet another important step in the implementation of this project. The formation of operating well stock will enable us to meet the primary objective of the consortium’s participants: to begin production at the oil deposit in 2013, as stipulated in the service agreement,” commented Boris Zilbermints, Deputy CEO for Exploration and Production.

Reference

The Badra oil deposit is located in the Wassit Province in Eastern Iraq with estimated reserves of 3 billion barrels of oil. The contract to develop the Badra oil deposit was signed with the Iraqi Government in January 2010 following a tender in December 2009. This tender was awarded to an international consortium comprising of Gazprom Neft, Kogas (Korea), Petronas (Malaysia) and ТРАО (Turkey).

Gazprom Neft's share, as lead operator on this project, is 30 per cent, Kogas' share is 22.5 per cent, Petronas' share is 15 per cent and ТРАО's share is 7.5 per cent. The Iraqi Government, represented by the Iraqi Oil Exploration Company (OEC), retains 25 per cent.

Oil production at the deposit is expected to begin in 2013. Production is expected to reach 170,000 barrels per day (around 8.5 million tonnes a year) by 2017 and remain at this level for seven years.

Gazprom Neft completed a 3D field seismic survey at the deposit in early May 2011. The preparation of the front end engineering design (FEED) will be completed in summer 2011.