Eni: $7bn For Iraq’s Zubair

Eni announced this week that it plans to invest an ‘additional’ $7bn at its 500,000 b/d Zubair field (Eni 41.56%, Kogas 23.75%, Basra Oil Company 29.69%, Missan Oil Company 5%). The firm failed to give a timeframe for the spending.

Of note, the announcement stated that the Italian firm’s output stands at 500,000 boe/d. Within this, 486,000 b/d is liquids, putting it within touching distance of its end-2019 target of 500,000 b/d. Despite the huge volumes, Baghdad’s tight remuneration terms mean that Eni netted just 28,000 b/d liquids in 2018.

Whilst Zubair’s partners have faced their own struggles with Iraq’s unpopular technical service contracts (TSCs) – prompting Occidental’s 2015 exit amid payment frustration ( MEES, 13 November 2015 ) – Zubair is a relative success story when compared to the other massive fields offered up in Iraq’s first licensing round in 2009. Output was only 270,000 b/d when Eni managed to renegotiate the field’s production plateau target (PPT) from 1.2mn b/d to 850,000 b/d in 2013 ( MEES, 31 May 2013 ). Output hit 400,000 b/d in September 2016 following a production capacity increase to 660,000 b/d, encouraging Eni in early 2017 to set production targets of 500,000 b/d by end-2019 and 700,000 b/d by 2020-22 ( MEES, 26 May 2017 ). (CONTINUED - 354 WORDS)