22 June 2010 (Source: PressReleaseNetwork.com)
For the first time in more than three decades, two oil and gas exploration license bidding rounds took place in Iraq in 2009. The first round saw a consortium consisting of the UK’s BP and China’s CNPC spearheading IOC activities as they won the first 20 year service contract to develop Iraq’s Rumaila oil field, which holding 17.8 billion barrels in crude reserves, is Iraq’s largest oilfield and one of the largest in the world.
The Energy Exchange catches up with Michael Towshend, BP President of Iraq ahead of the Iraq 2010: Future Energy conference.
The Energy Exchange: It has been sometime now since BP and CNPC were first awarded the 20 year service contract for Rumaila, can you briefly tell us, how are thing progressing? What in your opinion would you say were the main obstacles that you faced being the first IOC to enter Iraq from such an auction?
Michael Townshend: It is now six months since the contract became effective and much work has been achieved. The Joint Management Committee has been formed and is meeting regularly with partners of South Oil Company (SOC), PetroChina and SOMO. Along with the initial production rate, the annual work programme and budget was approved early on. Key contracts have been awarded and plans are in place to double the activity in the field towards the end of the year. Key appointments have been made at the senior and team leader level and from July the Rumaila Operating Organisation will be established which will run the Rumaila field.
It’s been a great opportunity for BP and our partners. We have worked on Rumaila for a long time in the past and know the field well, plus over this last six months we have spent time working closely with SOC and PetroChina to develop plans to increase the field production over time.
The Energy Exchange: You teamed up with CNPC (PetroChina) for the consortium. Were there any major factors that they brought to the table which complimented BP and will help in the development of the field?
Michael Townshend: BP, SOC and PetroChina have complementary strengths. All world class companies, with SOC having deep expertise in running Rumaila, Petrochina with an already established presence in Iraq and access to a diverse and competitive supply chain.
The Energy Exchange: An important role of the IOC working in Iraq today is that of information and knowledge transfer through employment opportunities, training and best practice knowledge sharing. On Rumaila, are BP actively working with local companies and actively encouraging the local workforce to work in the oil and gas sector?
Michael Townshend: One of the largest direct employment and training opportunities will come through the 3,000 plus SOC staff that are transferred into the Rumaila Operating Organisation which will run the field. In addition and from the start Iraqi companies will have the opportunity to participate. Recently the Iraq Drilling Company won the tender for the supply of rigs and associated services for the field. In addition the Base camp being constructed is mostly through Iraqi companies.
In terms of training we have already started working with the British Council, undertaking preliminary English language needs assessment for staff working on Rumaila. Its still early days though and over the course of the next year we will start to develop more comprehensive programmes.
The Energy Exchange: In terms of getting to grips with production from Rumaila, what role are both the local and international technology and service providers playing in helping you to increase oilfield performance? Are you finding the technology needed locally or is there a requirement for international support?
Michael Townshend: It’s not a question of either/or. The point about the contracts was to bring the best of local experience and knowledge with expertise from around the world. The recently awarded drilling contracts are an example of this where we have a mixture of international and local companies.
The Energy Exchange: Through the Rumaila field, do you envisage further opportunities to diversify within Iraq? Will BP become involved in downstream operations focusing upon refinery and petrochemical mega projects or do you see your efforts remaining mainly in upstream projects?
Michael Townshend: Our priority is Rumaila. This is a giant field and worthy of our full attention. We are a long term partner of Iraq and although we have other activities in the country, and will always look for other opportunities, the Rumaila field rightly deserves our foremost focus.