Malaysia's Petronas and Japan Petroleum Exploration (Japex) are planning to award a deal shortly to drill several wells at Iraq's untapped Garraf [Gharraf] oil field in southern Iraq, a company executive said.
The consortium is planning to drill two appraisal wells at Garraf, in Dhi Qar province, starting in November, he said.
"We have issued a tender but we haven't awarded it yet," the executive told Dow Jones Newswires.
The Petronas-Japex alliance was awarded the deal to develop Garraf, with estimated proven oil reserves of one billion barrels, during the country's second licensing auction in December last year.
The field was discovered in 1984, but has not yet been developed. It is situated 5 km northwest of Al-Refaei city, 9 km southeast of Qal’at Suker city, and 85 km north of Nasiriyah.
The executive said the consortium is in discussions with tribesmen who had allegedly refused to cede their ancestral lands peacefully without a cash payment from the two companies.
"We are in discussions with them," the executive said.
The alleged extortion drew condemnation from the Iraqi oil ministry, and the tribal sheiks have since denied any threat of violence, saying that they merely approached the two companies with a request.
Local leaders appear to have helped mitigate the tribal pressures, an Iraqi oil industry source said.
The companies pledged to boost crude oil production from Garraf to 230,000 barrels a day in 2016 and accepted $1.49 for each barrel produced.
Petronas holds 45% stake in the venture, Japex owns 30%, while the remaining 25% sake is owned by Iraq's state oil company.
(Sources: Upstreamonline.com, Dow Jones, Iraqi Ministry ofOil)