Oil Companies trim Investments in Iraq

By John Lee.

Major oil companies including BP, Shell and Lukoil are reported to be cutting investment in Iraq.

You’re going through difficult months,” said Ariel Flores, general manager of the BP-led Rumaila Operating Organization (ROO) told the Wall Street Journal. “You slow down and you make decisions to pause efforts.

Rumaila oil field now has two rigs drilling for new oil, down from as many as six earlier this year, but the company says it still wants to increase production and can do so more cost-effectively by focusing on wells that already exist. Output is expected to remain at around 1.4 million bpd this year.

Production at Shell’s Majnoon oil field has stalled at 200,000 bpd, and although it has plans to double output, the company is just focusing on sustaining production this year.

Russia’s Lukoil said earlier this year that it needed to invest more just to keep production steady at the giant West Qurna-2 oil field. “We’re not ready to proceed to the next phase of development until our negotiations with Iraq lead to some changes in the economics of the contract,” said Pavel Zhdanov, Lukoil’s head of capital markets and M&A, on an investor call last month.

(Source: Wall Street Journal)

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