Iraq has begun soliciting bids for a new $4 billion project to boost production at its southern oil fields. The intention is that seawater will be injected into the fields to accelerate the removal of the remaining crude. According to the director-general of the state-run Basra Oil Co., Abdul Jabbar, five companies have already shown interest in constructing a facility to double output at the country’s Majnoon field.
Last month in Berlin, the Iraqi Oil Ministry’s director-general for upstream oil contracts, Abdul Mahdy Al-Ameedi, said the country has engaged with PetroChina Co. and ExxonMobil, the manufacturer of lubricants for Mobil UK distributors, about areas of the project.
Iraq is OPEC’s second-largest oil producer. While it pumped 4.43 million bpd in February, a dispute with the semi-autonomous Kurdish region has affected exports through a pipeline to Turkey. The country is looking to offset this by boosting sales from its rich southern fields.
Iraq is also looking at building an export and storage facility off its Gulf coast. While the country already has a Gulf export terminal, rough weather can lead to waiting times for tankers once the weather abates. Adding a second terminal should mean all vessels can immediately start loading again. This will form part of Iraq’s strategy to maintain an export capacity greater than production, which officials say is needed to ensure enough flexibility in cases of disruption.
While Iraq is committed to the current OPEC-led production cuts, it sees its oil production capacity reaching five million bpd by the end of 2019.