International Oil Companies: China National Petroleum Corporation (CNPC)

CNPC logo 2Name: China National Petroleum Corporation (CNPC)

Based in: China

China National Petroleum Corporation (CNPC) is a Chinese state-owned oil and gas corporation and the largest integrated energy company in China. Its headquarters are in Dongcheng District, Beijing.

CNPC is the parent of PetroChina, the fourth largest company in the world in terms of revenue as of July 2014.

Fields in Iraq: Ahdab, Halfaya, Rumaila. CNPC subsidiary PetroChina owns a stake in West Qurna I.

From the company’s website:

In June 1997, Al-waha Petroleum Co., Ltd, a joint venture of CNPC and China North Industries Corporation, signed an agreement with Iraq’s Saddam Hussein government to develop the al-Ahdab oil field, which was postponed by the UN sanctions on Iraq and the following U.S.-led invasion to the oil-rich state. In November 2008, CNPC signed a Development Service Contract of Al-Ahdab Oilfield with Iraq’s Ministry of Oil.

In the first and second rounds of international oil/gas bidding in 2009, CNPC joined forces with BP in winning the operating rights to Rumaila, and with Total and Petronas in winning the contract for Halfaya. In 2013, we acquired a 25% stake in Iraq’s West Qurna-1 oilfield from ExxonMobil.

Al-Ahdab Oilfield

Located 180 kilometers southeast to Iraq’s capital city of Bagdad, Al-Ahdab Oilfield has a structural area of about 200 square kilometers. As stipulated in the contract, CNPC will apply advanced development technologies to meet the benchmarks of 25,000 barrels/day of oil within the first three years and 115,000 barrels/day of oil by the end of sixth year. After the oilfield go on stream, it will supply some of the produced oil to fuel the nearby power plants to ease the power shortage in Iraq.

In 2011, the project at Al-Ahdab Oilfield built an annual capacity of 6 million tons, making it the first new oil project to start production in Iraq over the past two decades.

In 2012, the project maintained smooth operation with the capacity to produce and process 6 million tons of oil and 800 million cubic meters of natural gas annually. The rapid increase in production at Al-Ahdab met the oil needs of the power plant and refinery in Baghdad. In addition, high-standard waste mud treatment technology was introduced to the project, which can extract more than 99% of the oil from oil sludge. The treated effluent, meeting Iraq National Class I-B, can be used for irrigation and fish cultivation. This treatment technology is highly recognized by the Iraqi government, which requires it to be used in other projects.

In 2013, the Al-Ahdab Oilfield maintained an output of 135,000 barrels per day and cumulatively produced more than 10 million tons of oil since its inauguration in June 2011. With a diverse oil and gas transport network consisting of pipelines, LPG loading stations, and oil loading stations, it helped to increase the local energy supply capacity.

Rumaila Oilfield

Rumaila Oilfield is located 50 kilometers west to Basra in South Iraq, covering an area of 1,800 square kilometers. Discovered in 1953 and been operational in 1972, Rumaila is the largest oilfield in Iraq and the 6th in the world, with oil reserves of about 17 billion barrels.

On November 3, 2009, CNPC, and British Petroleum (BP), inked a technical service contract with Iraq’s State Oil Marketing Organization (SOMO) and South Oil Company (SOC) in Baghdad to expand production Iraq’s Rumaila Oilfield. CNPC and its partners will expand Rumaila’s daily productivity to 2.85 million barrels from the current 1.1 million during a six year period, which will help Iraq rebuild its economy.

In 2010, the Rumaila Field Operating Organization (ROO), a consortium by CNPC, BP and Iraq’s South Oil Company, took over operation management and commenced operation in the oilfield. Over the course of the year, a total of 41 wells were drilled, 103 workovers completed, and 122km of flowlines laid. The initially targeted 10% increase of daily oil production was met in December, 2010, thanks to the commencement of production at new wells and optimization of production parameters.

In 2012, the joint project maintained a rapid increase in oil output thanks to enhanced reservoir study and stimulation measures. The average daily output of Rumaila accounted for 44% of Iraq’s daily total.

In 2013, the project achieved an output of 1.36 million barrels per day.

Halfaya Oilfield

Halfaya oilfield, situated in southern Iraq, has estimated reserves of 4.1 billion barrels of oil. In the second round of international oil/gas bidding in Iraq in 2009, CNPC joined forces with Total and Petronas in winning the contract for Halfaya.

In January 2010, the service contract was formally signed for the Halfaya Oilfield, which is operated by CNPC in consortium with Total, Petronas, and Iraq’s Missan Oil. The terms of the contract require the consortium to increase daily output to 535,000 barrels per day, with CNPC as the operator. In December 2010, 3D seismic acquisition was formally commenced and the first batch of three horizontal appraisal wells with the designed depth of more than 4,000m were spud in.

In 2011, the project was well underway, with seismic prospecting, drilling, and surface engineering rolled out. In fact, the project was recognized by the Iraqi Ministry of Oil the one with the “fastest progress and best construction quality” among of the awarded projects in the second round of international bid invitation.

In June, 2012, the 5 Mt/a capacity building project in Iraq’s Halfaya Field, in partnership with Total, started production and delivered crude oil ahead of schedule.

In 2013, we worked with Total and other partners at the Halfaya project to optimize production management and deploy multilateral horizontal drilling. Oil production remained at more than 100,000 barrels per day, and Phase-II construction commenced.

For latest news on this company’s activities in Iraq please click here.

A full list of International Oil Companies (IOCs) operating in Iraq under licences granted by the Ministry of Oil in Baghdad can be found here.