Planned Rumaila Output

Ruba Husari has some interesting reporting on the development of the Rumaila field by BP and partners - the first of the big Iraqi field redevelopment projects.  There are two pieces: March 28th, and April 22nd (you have to set up a free login at her site to read them).  The first piece covers the anticipated work and production increases (and I made the above graph of estimated year-end production from her figures, together with the 2016 deadline to achieve the contracted plateau of 2.85mbd):

The Rumaila oil fields, North and South, are getting their biggest face lift in a long time and at a rate which will see the fields doubling their output within three years to some 2 million barrels per day. At a joint management committee (JMC) meeting last week, the second so far since the Rumaila service contract won by BP and CNPC in June 2009 became effective Dec. 17, several major contracts worth over $600 million were awarded.

Contracts for the drilling of 56 wells went to a Chinese company which will provide 3 rigs, Iraq Drilling Co. (IDC) jointly with Schlumberger will provide another 3 rigs and a seventh rig is to be provided by Weatherford. The companies will be mobilizing and starting work on the ground within the next six months. Timing and speed in delivery were major criteria in the selection of the winners, according to a member of the Rumaila JMC. A contract for the supply of wellheads went to top-notch in its class, Houston-based Cameron.

A contract for the supply and servicing of Electrical Submersible Pumps (ESP) was split between two companies. Baker Hughes will get to do just over 60% of the work while Saudi Al-Khorayef Petroleum Co. will carry out the remaining 40% or so. According to the fields’ maintenance plan, ESPs should be installed in 160 wells over two years, half of which will be done in 2010 alone. Al-Khorayef’s most recent expertise stems from a contract awarded by Saudi Aramco in 2006 for the installation and maintenance of 236 ESPs at the Khurais field. Still, the Iraqi contract includes a provision for cancellation if the client is not satisfied, sources at Rumaila field Operating Division tell me.

The second piece gives more detail on how the fields were managed in the past:

To start with, electric submersible pumps were only used in Upper Shale at depth of 3100 meters where reservoir pressure was very low. “We had no reason to use submersible pumps in Main Pay or in Mishrif since the pressure was good in those reservoirs and the wells were producing,” a veteran SOC official and currently on the Rumaila Operating Division told me during a recent visit to Rumaila.

Iraqi reservoir specialists recognized a long time ago that the use of submersible pumps in high pressure reservoirs would increase production and push the recovery factor further but would result in a high water cut which they did not have the means to handle, nor did they have the necessary investment at hand to treat wet crude. “We used to stop producing the wells once the water cut becomes high, but now for the first time this is not an obstacle,” the official said. Wet crude production facilities were introduced in North and South Rumaila in the late seventies to cater for the expansion scheme at the time, but their capacities could only cater for about 25% of the produced oil. As wet crude production increased as a result of the advance of the water aquifer as well as water injection, the constraints became too many to handle.

Needless to say, a plateau of 2.85 million barrels per day now targeted by BP from the two Rumaila fields was never the goal in the past. Now BP with partner CNPC are pushing ahead with high rate, well-positioned wells in order to provide high production rates, admittedly with high water cut, in order to generate early cash flow. At this rate, the 10% incremental output committed in the service contract signed last year will be reached way ahead of time.

Iraq has been lagging behind its neighbors, let alone the rest of the world, in the introduction of horizontal drilling across the board. The first horizontal well in southern Iraq will be drilled in the Mishrif reservoir in North Rumaila later this year.

Apparently, developing the oil fields is going a lot better than developing the new government. That process still appears to be a complete mess:

U.S. Ambassador Christopher R. Hill expressed deep concern Monday about how slowly Iraqi officials have moved to seat a new government, saying they need to "get this show on the road."

U.S. officials see the formation of a new government and a smooth transfer of power as crucial precursors to the scheduled drawdown of all but 50,000 troops by the end of August.

Hill's unusually blunt comments reflect growing U.S. anxiety about a process that has been slowed by a host of factors. They include the close results from the March 7 parliamentary elections, a recently ordered manual recount of the approximately 2.4 million ballots cast in Baghdad, and ongoing efforts to disqualify candidates for alleged sympathies to Saddam Hussein's Baath Party.

"Obviously, one would like to see them pick up the pace," Hill told journalists at the U.S. Embassy on Monday evening. "While we always knew this was going to be a tough period, we are approaching almost seven weeks" since the vote.

The leaders of the two blocs that garnered the most votes, Shiite Prime Minister Nouri al-Maliki and the Sunni-backed secular Shiite Ayad Allawi, contend that there were serious irregularities that affected the elections' outcome. Maliki, whose coalition trailed Allawi's by two seats, demanded the manual recount.

Allawi says rival Shiite politicians, acting with Maliki's blessing, abused the authority of a commission empowered to weed out Baath sympathizers in order to weaken his bloc.

Still, it wasn't a quick process last time either:

After the December 2005 parliamentary elections, it took nearly six months to form a government. At the time, Iraqi officials did not have to grapple with candidate disqualifications or manual recounts.