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Russia's Rosneft group has started drilling its first exploration well at Block 12 in Iraq.

The Salman-1 well will be drilled to the measured depth of 4,245 m through Kurra Chine target horizon to be followed by further testing of five prospective targets. The Company plans to complete drilling in July 2017.

Company of Rosneft group acts as the operator of the exploration and development of Block 12. China-based company Zhongman Petroleum and Natural Gas Group (ZPEC) is the general drilling contractor .

Iraq has huge proved and undeveloped oil resources. Exploration in Iraq is an important step in implementing the Rosneft strategy to expand competences in the area of hydrocarbon exploration and production outside of Russia.

The prospective oil-bearing Block 12 is located in the Najaf and Muthanna provinces, approximately 80 km to the southwest of the city of Samawa and 130 km to the west of the city of Nasriya. The block is a part of the Western Desert, an unexplored region having the biggest oil potential in Iraq. It has an area of 7,680 sq km. Exploration works on Block 12 are considered "low risk" due to its prospects.

(Source: Rosneft)

By John Lee.

Iraq has approved a $526.6-million (614 billion Iraqi dinar) drilling deal with China's Zhongman Petroleum and Natural Gas Group (ZPEC) for the West Qurna II oilfield, according to Reuters.

Under the 28-month contract, ZPEC will drill 66 production oil wells at the Lukoil-operated field.

Current production capacity at West Qurna II is over 400,000 barrels per day, but actual output is less than 350,000 bpd.

(Source: Reuters)

By John Lee.

Russia's Gazprom Neft, the operator of the Badra oil field (pictured) in Iraq, has announced that first oil from the field is now being delivered to Iraq’s main pipeline system for transfer to the export terminal in Basra, on the Persian Gulf.

Current deliveries from Badra to the pipeline stand at over 15,000 barrels of oil per day and this level should be maintained until the end of 2014.

According to the service contract with the Government of Iraq, the consortium of investor companies will begin receiving a share of the oil produced at the field after a period of 90 days following launch of commercial supply.

All of the oil produced in southern Iraq, including at Badra, is Basrah Light oil. The Iraqi State Oil Marketing Organization (SOMO) is responsible for oil sales and each quarter will be delivering a share of oil to the investor companies to reimburse their initial project costs.

Once these project costs have been covered, the investor companies will receive remuneration in kind for ongoing development at the rate of $5.5 of oil per barrel produced. Each investor company will be selling their share of oil independently.

First oil from the Badra field was produced in December 2013. Final commissioning at the field and testing of production and transportation infrastructure began in May 2014. Two wells are currently in production at the field and a further three wells are being drilled under a contract with the Chinese company ZPEC. According to the service contract production at the field will achieve 170,000 barrels of oil per day.

Alexander Dyukov, Chairman of the Management Board of Gazprom Neft, said:

"Over the period of just a few years, a consortium of companies led by Gazprom Neft has fully prepared Badra, one of the most complex geological field structures in Iraq, for full-scale commercial development.

"This is the first major international project in upstream the company has implemented from scratch. The unique experience gained during this project will contribute to our development of future projects both in Russia and internationally".

The field is being developed by Gazprom as lead partner (30% stake), along with Korea’s KOGAS (22.5%), Malaysia’s Petronas (15%), Turkey’s TPAO (7.5%), and Iraq (25%).

(Sources: Gazprom Neft, KOGAS)

By John Lee.

Gazprom Neft, operator of the Badra oilfield, has reported the successful completion of well-testing at its BD4 appraisal well at the end of December, 2013.

Potential production capacity was tested through the sequential testing of six drilled strata, followed by final testing of all pay horizons concurrently. A daily natural flow rate of 7,000 barrels of oil was recorded.

Testing continues at two other drilled wells within the same field. 2014 will also see work begin on the drilling of six production wells under the company’s contract with China’s ZPEC.

The infrastructure necessary to bring the field into commercial production in 2014 is also nearing completion. Work also continues on the construction of a 170,000 bpd central gathering facility: the first line of which, with a capacity of 60,000 bpd, will come on-stream in the near future. Preparations for the construction of a 1.5 million cubic meter annual capacity gas conversion plant are also underway and work to connect the field to Iraq’s main pipeline network is also nearing completion.

Vadim Yakovlev, First Deputy CEO of Gazprom Neft commented:

“With well testing completed we are one step closer to beginning commercial production at the Badra field. Since beginning development — practically from scratch — just three years ago, a Gazprom Neft-led consortium has completed a major project in establishing all the facilities necessary for large-scale production at Badra, and this will begin as early as this year.”

(Source: Gazprom Neft)

By John Lee.

Russia's Gazprom Neft has picked a contractor to drill six production wells in the Badra field in Iraq which it operates. China’s Zhongman Petroleum and Natural Gas Group Co., Ltd (ZPEC) has won the tender.

The contract includes engineering, procurement and drilling of wells. Two rigs will start drilling in March 2014.

Two wells are currently undergoing tests in Badra and a third will be launched in early 2014 under earlier signed contracts. The infrastructure required to make the field operational in early 2014 will include the Central Collection Point with a total capacity of 170,000 barrels a day.

The first 60,000 barrels a day unit is due to be launched within months. A pipeline to the Garraf field, shortly to be completed, will deliver oil to Iraq’s long-distance oil transportation system.

(Source: Gazprom Neft)

(Picture: Drilling at Badra oil field)