Italy's Eni SpA and its partners will raise oil production from Iraq's Zubair oil field 10% above its previous level of around 180,000 barrels a day by the end of this year, the company said on Tuesday.
Dow Jones reports that once the 10% increase is achieved, Eni will start receiving payment in the form of small crude oil shipments whose value is equivalent to $2 for each barrel of extra production.
Chief Executive Paolo Scaroni told reporters at a London press briefing:
"We will be paid next year, but it will not be big volumes" of Basra heavy crude, Iraq's export blend of oil from many fields, he said.
Earlier this year, Eni said it would drill 12 new wells and overwork five others this year to boost Zubair's output. The field, with 6.5 billion barrels of proven oil reserves, was producing 183,000 barrels a day before this work started.
Eni and partners Occidental Petroleum (OXY) and Korea Gas (Kogas) set a plateau target of 1.2 million barrels a day for Zubair to be reached in six to seven years' time.
Most of the large international oil companies have agreed to boost output from neglected Iraqi oil fields in exchange for a per-barrel fee from the government, which retains ownership of all the country's oil resources.
(Source: Dow Jones)