Iraq OKs $998M oil contract with Samsung

Iraq OKs $998M oil contract with Samsung

Winning company to build crude facilities in W.Qurna 2; Duration of $998 mln contract is 31 months; Production expected to reach 150,000 bpd by Jan 2013

January 25, 2012 2:08 by Reuters

Iraq’s cabinet approved a $998 million oilfield service contract on Tuesday with a South Korean company for the West Qurna Phase Two oilfield, the cabinet said in a statement.

An Iraqi oil official who asked not to be identified said the deal was with Samsung Engineering, the only South Korean company on the final shortlist.

Iraq and its partners, Russia’s LUKOIL and Norway’s Statoil, had shortlisted last year five companies to compete for the West Qurna Phase Two oilfield development contract.

The oil service companies selected were Saipem, SNC Lavalin Group Inc, Punj Lloyd Ltd, Globalstroy Engineering and South Korea’s Samsung Engineering, an oil official said.

Tenders announced were for construction of an oil export pipeline, a tank farm at Tuba, a power distribution station and an associated gas processing plant, and also an oil gathering system, central processing facilities and a water supply system.

The deal is part of the initial development plan set by LUKOIL and Statoil and approved by Iraq’s oil ministry in 2010 to start production from the untapped oilfield.

They are expected to help production at the field hit 150,000 barrels of oil per day (bpd) in January 2013, an Iraqi oil official said.

LUKOIL and Statoil sealed the 20-year deal to develop the West Qurna Phase Two in an auction in December 2009, pledging to boost output to a plateau target of 1.8 million barrels per day (bpd) in six years. *image from res.heraldm.com