ENI to drill 68 new oil wells in Iraq

ENI_Iraq

Italy's ENI is speeding up work in Iraq's Zubair oilfield despite ageing facilities there and plans to drill about 68 new oil wells through next year to increase production, Iraqi officials said.

The plan to hike output to 700,000 barrels per day (bpd) by 2013, includes drilling new wells this year, overhauling existing wells, a water injection program and repairing pipelines and old oil facilities, Iraqi officials at the field said. Zubair's production now is around 270,000 bpd.

ENI and its partners aim to drill around 42 new wells in 2011, about 26 new wells in 2012, and install about 125 electric submersible pumps during the next three years, Abdul-Jabbar Mohammed, facilities improvement and construction manager at Zubair said.

"The amount of work in this field is huge," he said. "This is an old field, production started in the early fifties. Some of its facilities are very old. We have overhauled and maintained some of it and the rehabilitation is continuing."

The development plan for the field also includes building five new degassing stations and revamping existing ones to cope with the increase in production, he said.

"There is a plan to build five degassing stations. We have proceeded with the designs and we preparing the tender documentations," he said.

Drilling new wells, overhauling existing ones and installing electric submersible pumps are ways to overcome the natural decline of the field and boost production.

ENI managed this year to hit its 10 per cent increase in output from Zubair — known as its initial production target — that qualifies it to recover investment costs from Iraq.

The initial production boost came mainly from rehabilitation of existing wells and using submersible pumps, but drilling new wells has just started, officials said.

ENI operates the field, one of Iraq's largest, in a consortium with Iraqi Missan Oil Company, Occidental Petroleum Corp. and South Korea's Korea Gas Corp. They expect it to reach 1.2mn bpd in six years.

The deal is one of a series aimed at developing major and untapped oil fields that could boost Iraq's output capacity to Saudi Arabian levels of around 12 million bpd from around 2.7mn bpd currently.

But several obstacles remain. Iraq's oil sector has been hit hard by years of war, sanctions and underinvestment. One of the main challenges is to provide some southern fields with huge amounts of water to boost pressure and output.

Water injection helps to increase the amount of crude that can be pumped from oil fields and will be key to enabling the oil firms to reach ambitious production targets.

ENI plans to start a water injection project this year through using two existing water facilities and plans to build a new project to supply Zubair with more water, Mohammed said.

"We have few water sources here that's why we are looking for other options," he said. "Now there is a study to secure water from the river."

The water project for Zubair would cover the field's needs for the next three to four years, until a multibillion-dollar water injection project led by ExxonMobil is completed, he said.

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