WorleyParsons Wins Rumaila Oilfield Contract

Australian engineering contractor WorleyParsons (WOR.AU) has won a contract to carry out engineering and design work at BP's giant Rumaila oilfield in southern Iraq.

Sources familiar with the deal said the front-end engineering and design (FEED) contract was awarded to WorleyParsons by the consortium which includes Iraq's state-run South Oil Company, BP and China National Petroleum, which jointly operate the Rumaila field.

WorleyParsons will carry out FEED work for the project, although the contract has yet to be approved officially by the Iraqi government, a sources told Dow Jones.

BP and CNPC, both of which signed a 20-year service contract in November last year with Baghdad to develop Rumaila, plan to increase production by 10 per cent this month from 1.06 million barrels a day.

The group has already started drilling at the field as they awarded earlier this year contracts worth up to $500 million to drill 49 wells. $15 billion is expected to be invested in the project over the 20-year duration of the contract.

The BP-led consortium has pledged to almost triple production at the field to 2.85 million barrels a day. BP holds a 38 per cent stake in the venture, while CNPC has 37 per cent and Iraq's SOC holds the remaining 25 per cent.

The three contractors will receive a fixed fee of $US2 for each additional barrel of oil produced from Rumaila.

(Sources: Dow Jones, The Australian)

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