Gazprom Neft’s share of the project as operator is 30%, while Kogas has 22.5%, Petronas 15%, and TPAO 7.5%. The Iraqi government is represented by Oil Exploration Company (OEC) with a 25% interest. The consortium will provide 100% of the financing.
The Badra field lies in the province of Wasit in eastern Iraq, bordering Iran’s Azar field. Initial estimates suggest that recoverable reserves at Badra may exceed 700 million barrels of crude oil.
Development of the Badra field is expected to last 20 years, and may be extended for an additional five years. It is expected that peak oil production will reach about 170 thousand barrels per day in 2017.
Under the contract, Gazprom Neft will receive USD 5.5 for each extracted barrel of crude oil (or quantity of crude that is equivalent to the price) after the project achieves an initial production level of 15 thousand barrels per day. This is expected to occur in 2013, and peak production rates should be achieved in 2017.
- Phase 3 has been completed.
- Well construction is actively in progress: a well bored, and another close to completion.
- The contract for the testing and pumping-in of 11 wells has been signed with Halliburton.
- Key contracts for constructing a CPF (Phase 1), an export oil pipeline, Badra Camp (Phase 2), for rendering Project Management Consultancy services and FDP preparation have been signed.
- Contracts for water treatment and water supply for the CPF, as well as for the construction of the oil gathering facilities have been awarded.
- The work for preparing the CPF site and sulfur storage has been completed.
- Drilling and development of wells, commissioning thereof.
- Completing the main part of the designed field development.
- First oil discovery (Q4 2013).
- Commissioning of the initial oil refining line, gathering facilities and oil pipeline.
- Commissioning of the second line, first gas treatment line, gas pipeline.
According to the Gazprom Neft estimates, the joint resource potential for the two fields exceeds 500 million tonnes of oil equivalent (3.6 billion BOE). Over the next 8 years, the blocks are expected to achieve peak production of at least 130 thousand barrels per day.
At present, a geological survey of the blocks is still in progress, to be completed no later than 2015 and followed by the commencement of production.
Gazprom Neft’s share of the Garmian block is 40%. The Company is expected to become the block operator at the full field development stage, provisionally in 2014.
In the Shakal block, with its share of 80%, the Company functions as the project operator. The share of the Kurdistan Regional Government in both agreements is 20%.
The total payments to be made by Gazprom Neft for joining the projects, including compensation for historical costs incurred, will amount to some USD 260 million. The investments in geological surveys in both projects prior to 2015, naturally attributable to Gazprom Neft, are estimated at USD 1 billion. The PSA mode provides for compensation for costs incurred by the investor after the commencement of field production.
(С1+С1), million tonnes of oil equivalent 173
- Geological survey implementation at both blocks: completion of 3D-seismic survey at the Shakal block and drilling Well 1. In addition to the two exploration wells drilled at the Garmian block, drilling at another three exploration wells is expected to begin (including one to be completed in 2013) jointly with Western Zagros. The expanded geological survey program also provides for a 3D-seismic survey in the northern part of the block;
- Further development of Gazprom Neft in the most promising oil and gas Kurdistan regions.