US oil field services provider Halliburton is beginning to see project activity ramp up in Iraq after delays led to financial losses in the country, reports Argus News.

The company commenced drilling at three rigs late in the third quarter, and expects three more to come on line by the end of the year.

“We expect to return to profitability there next year,” said chief executive David Lesar (pictured).

(Source: Argus Media)

Halliburton has been awarded a contract by ExxonMobil Iraq Limited (EMIL) to provide drilling services for 15 wells in the West Qurna (Phase I) oil field located in Southern Iraq.

Halliburton will provide a complete range of well construction services utilizing three drilling rigs to safely deliver the wells.

Joe Rainey, president of Halliburton’s Eastern Hemisphere operations, said:

“This contract award is a testament to the ongoing success of our Eastern Hemisphere growth strategy and is in addition to work awarded in this field by this customer in 2010.“

Halliburton has been active in the Middle East since 1946. Currently, Halliburton has more than 4,000 employees in the Middle East.

Announcing a 60% increase in net income for 2010, Halliburton‘s chairman, president, and chief executive officer, Dave Lesar (pictured), commented on the company’s Iraqi operations:

“I am very pleased with our results on the international front. Key markets including Norway, West Africa, Iraq, and Algeria experienced increased activity … We continue to win significant additional awards in Iraq.

We, therefore, are investing heavily in our infrastructure and incurring mobilization costs. I am pleased to announce that we were modestly profitable in the fourth quarter in Iraq, several quarters ahead of schedule.

We now have nearly 600 employees in Iraq with a plan to have 1,200 employees in 2011 to handle the work we have been awarded.”

(Source: Halliburton)

Oil companies working in Iraq complained of a “mafia” type atmosphere that drove the price of security up considerably, according to leaked U.S. diplomatic cables revealed by Wikileaks.

London’s Guardian newspaper reports that official at oil services company Halliburton complained the price of security in Iraq was “unwarranted” during a modestly secure environment in 2008.

“Halliburton Iraq country manager decried a ‘mafia’ of these companies and their ‘outrageous’ prices, and said that they also exaggerate the security threat,” wrote U.S. provincial reconstruction leader John Naland in a January cable.

An unnamed Halliburton executive complained of “questionable” reports on the vulnerability of its employees working in Iraq.

The Iraqi government and oil companies were also encouraged to get rid of most of the Westerners working as private security contractors in the country.

“According to XXXXXXXXXX, the government of Iraq is anxious to ‘get rid of all the white faces carrying guns’ in their streets,” the cable reads.

(Source: The Guardian)

American oil-services company Weatherford International announced on Monday that it has completed the drilling of 20 oil wells in southern Iraq, at oilfields including Rumaila and Bazergan.

Work is continuing at another 70 wells.

The company’s Director, Ramzi al-Harithy, told Aswat al-Iraq news agency during the recent Oil & Gas Exhibition in Basra that his company has no connections with the U.S. company Halliburton in developing eastern Iraq’s Majnoon oilfield.

Bazergan oil field, 24 km to the east of Amara city, is expected to reach full capacity at 2,000-3,000 barrels per day. Drilling on the oil field began on 10th September this year.

(Source: Aswat al-Iraq)

Reuters, citing “industry sources familiar with the matter”, reports that U.S. oil major ExxonMobil and its partners have awarded a contract to oil services firm Schlumberger to drill 10 wells in Iraq’s West Qurna 1 oilfield.

The contract award was finalised a few days ago but a final contract is yet to be signed by Schlumberger, the sources told Reuters.

The new wells are part of the Exxon-led consortium’s plan to rehabilitate West Qurna, for which it signed a 20-year development contract with Iraq earlier this year.

Leading service companies including Weatherford International, Halliburton, and Schlumberger were also said to have been invited to bid for another tender to drill 15 new wells, which could be awarded by early next year.

The state-owned Iraq Drilling Company was also invited to bid. Exxon and Shell were awarded the deal to develop the 8.7-billion-barrel West Qurna 1 oilfield last year.

Exxon and its partners raised their production plateau target for West Qurna 1 to 2.825 million barrels per day after adding new reserves to the area.

In March, Schlumberger was awarded a contract to drill new wells at BP‘s Rumaila oilfield.

(Source: Reuters)

Halliburton signed the one-year contract with Shell on Tuesday to develop the Majnoon oilfield, according to a media source from Shell.

Hanadi al-Salman told Aswat al-Iraq news agency that, “according to the new deal, Halliburton will set up operation centers to dig 15 new wells,” he added.

When the contract win was originally announced in August, its estimated value was $150m.

A consortium including Royal Dutch Shell PLC and Malaysia’s Petronas have the contract to redevelop Iraq’s Majnoon oil field, one of the largest oil fields in the world.

Although the companies’ fee for raising output is considered small, it represents an important foothold in a country that potentially has massive untapped oil resources, said ING analyst Jason Kenney.

The Majnoon field, located in southern Iraq, holds some 12.8 billion barrels of oil reserves. The Iraqi state will hold a 25% interest in the licence, Shell will hold a 45% share and Petronas 30%.

(Source: Aswat al-Iraq)

MEED reports that prospects look good for the only oil services companies eligible to bid for work on Iraq’s oil fields.

At the Adipec oil and gas conference, which took place between 1-4 November in Abu Dhabi, the stands belonging to the ‘big four’ US oilfield services companies — Schlumberger, Baker Hughes, Halliburton and Weatherford — were busy as people queued up meet their senior decision-makers.

Prospects are definitely looking up for the big four at the moment and the reason, according to MEED, is Iraq. They, together with local Oil Serv, are the only oil field services companies being allowed to bid for work on the country’s existing oil fields.

After spending so much money during the licensing rounds, the international oil companies need to ramp up production on the Iraq fields and the quickest way to do it is to give the work to the services companies on a turnkey basis. By taking on such a risky venture, these five companies are hoping that it positions them correctly for when the market opens up fully.

Working in Iraq is risky in many ways, but developing these oil fields is about as close as you can get to a sure thing in the country. The industry knows that developing Iraq’s hydrocarbon reserves is real and it is happening. That’s why the big four’s stands were so popular at Adipec.

With Abu Dhabi and Saudi Arabia becoming quieter as they reach their production targets, the whole of the upstream oil and gas industry is relying on Iraq to drive regional revenues for the next 10 to 20 years.

That is where the big four are going and the rest are queuing up to follow.

(Source: MEED)