By John Lee.

Russia’s Gazprom Neft has reportedly revised down its output plateau for the Badra oil field.

Denis Sugaipov, head of Gazprom Neft’s department of large projects, told Reuters that the consortium running the project has proposed setting the output plateau for the next few years at its current level of around 85,000 bpd, as the field is more geologically complex than previously thought.

This is half the level initially planned as a plateau to be reached in 2017.

The field is being developed by Gazprom (30%), KOGAS (22.5%), Petronas (15%), TPAO (7.5%), Iraqi state-owned Oil Exploration Company (25%).

According to Reuters, $4.0 billion has been invested in the plant so far, including $1 billion for a gas processing plant; another $2.5 billion is planned to be invested by 2030.

(Source: Reuters)

A working meeting between Alexey Miller, Chairman of the Gazprom Management Committee, and Jabbar al-Luaibi, Minister of Oil of the Republic of Iraq, took place in St. Petersburg today.

The parties discussed the Badra project, which is implemented in Iraq by Gazprom Neft. Currently, the Badra field produces as much as 77,000 barrels of oil per day.

Gazprom Neft continues to construct oil and gas infrastructure, with start-up underway for a comprehensive gas treatment unit. The first and second trains of the project will go into operation in the 2nd and 3rd quarters of 2017, respectively.

Gazprom Neft is a vertically integrated oil company focused on oil & gas field exploration and development, oil refining, and petroleum product processing and marketing. The company’s largest shareholder is Gazprom (95.68 per cent); the rest of its shares are in circulation.

On May 31, 2014, Gazprom Neft started developing the Badra field located in the Wasit Province in the eastern part of Iraq. According to estimates, Badra holds 3 billion barrels of oil.

In January 2010, the consortium of Gazprom Neft, Kogas (Korea), Petronas (Malaysia), and TPAO (Turkey) signed a contract with the Iraqi Government for the development of the Badra field following a competitive tender. Gazprom Neft, as the project operator, holds a 30 per cent stake in the project, Kogas – 22.5 per cent, Petronas – 15 per cent, and TPAO – 7.5 per cent.

The Iraqi Government represented in the project by the Iraqi Oil Exploration Company (OEC) holds a 25 per cent stake. The Badra development project’s lifecycle is 20 years, with a possible five-year extension.

The cumulative oil production from Badra is in excess of 5 million tons.

Gazprom Neft allocated USD 10 million for social projects in the Wasit Province. The funds were used to build three schools, purchase computer equipment and school supplies, buy two minibuses for the University of Wasit, renovate and expand power grids in the neighboring population centers, provide local hospitals with medical equipment, and buy two ambulances.

At present, over 3,000 Iraqi citizens work at the Badra field. Gazprom Neft spent upward of USD 12 million on training programs for those workers.

(Source: Gazprom)

By John Lee.

Russia’s Gazprom Neft, the operator of the Badra oil field (pictured) in Iraq, has announced that first oil from the field is now being delivered to Iraq’s main pipeline system for transfer to the export terminal in Basra, on the Persian Gulf.

Current deliveries from Badra to the pipeline stand at over 15,000 barrels of oil per day and this level should be maintained until the end of 2014.

According to the service contract with the Government of Iraq, the consortium of investor companies will begin receiving a share of the oil produced at the field after a period of 90 days following launch of commercial supply.

All of the oil produced in southern Iraq, including at Badra, is Basrah Light oil. The Iraqi State Oil Marketing Organization (SOMO) is responsible for oil sales and each quarter will be delivering a share of oil to the investor companies to reimburse their initial project costs.

Once these project costs have been covered, the investor companies will receive remuneration in kind for ongoing development at the rate of $5.5 of oil per barrel produced. Each investor company will be selling their share of oil independently.

First oil from the Badra field was produced in December 2013. Final commissioning at the field and testing of production and transportation infrastructure began in May 2014. Two wells are currently in production at the field and a further three wells are being drilled under a contract with the Chinese company ZPEC. According to the service contract production at the field will achieve 170,000 barrels of oil per day.

Alexander Dyukov, Chairman of the Management Board of Gazprom Neft, said:

Over the period of just a few years, a consortium of companies led by Gazprom Neft has fully prepared Badra, one of the most complex geological field structures in Iraq, for full-scale commercial development.

“This is the first major international project in upstream the company has implemented from scratch. The unique experience gained during this project will contribute to our development of future projects both in Russia and internationally“.

The field is being developed by Gazprom as lead partner (30% stake), along with Korea’s KOGAS (22.5%), Malaysia’s Petronas (15%), Turkey’s TPAO (7.5%), and Iraq (25%).

(Sources: Gazprom Neft, KOGAS)

Russia’s Gazprom Neft has increased its estimated costs for the Badra oil field to about US $3 billion, reports Bloomberg, citing a bond prospectus recently issued by its parent company.

The company had previously forecast costs at about $2 billion.

The field is being developed by Gazprom as lead partner (30% stake), along with Korea’s KOGAS (22.5%), Malaysia’s Petronas (15%), Turkey’s TPAO (7.5%), and Iraq (25%).

The group is planning to produce 170,000 bpd from the field by 2017, earning a fee of $5.50 a barrel over the 20-year span of the contract.

(Source: Bloomberg)

(Picture: Drilling at Badra — Gazprom)

The state-run Turkey Petroleum Co. (TPAO) has discovered oil in the Sirnak province, near the southern border with Iraq and Iran.

According to a report from UPI, the company’s regional director, Gokhan Akin, said:

“The oil at the well is at the value of the neighboring country’s [Iraq] oil but the test studies for the daily capacity will be completed within this week.”

The company offered no estimate of the reserve potential at the Caliskan-1 well, which it started exploring six months ago.

(Source: UPI)