A consortium of Malaysia’s Petronas and Japan’s Japex embarked on developing the al-Gharraf oilfield it had obtained during the second round of oil licensing, an oil official in Thi-Qar province on Thursday.
“The Japanese-Malaysian consortium started initial works to upgrade al-Gharraf oilfield, (25 km) north of al-Nasseriya,” Kareem Yasser Hashem, the director of oilfields in Thi-Qar, told Aswat al-Iraq news agency.
Gharraf is one of five key oilfields in Thi-Qar whose combined reserves are up to 12 billion barrels. Gharraf alone is estimated to contain 3 billion barrels.
The two companies will receive fees of US$1.49 (S$2.09) per barrel produced.
Petronas will take 60 per cent while Japex will take the remaining 40 per cent.
Iraq auctioned Gharraf to the pair on December 12, the second day of a two-day oilfield auction which dramatically increased Iraq’s projected crude production to 12 million barrels per day (bpd) within seven years.
Iraq boasts actual oil reserves of 120 billion barrels, 11% of the total global reserves, ranking third worldwide despite suspended exploration and development since the 1970s. U.S. studies, however, concluded that Iraq is sitting on a lake of petroleum estimated to hit 350 billion barrels in reserves.
Nasseriya, the capital city of the province of Thi-Qar, lies 380 km south of Baghdad.