Gazprom Neft begins production in Iraq

02 June 2014

On 31 May, Gazprom Neft began production at the Badra oilfield in Iraq. The central gathering station (CGS) is currently undergoing complex testing of its crude oil processing system. Testing will be completed in three months once enough oil has been accumulated for commercial production to begin. The Badra field will then be ready to reach planned production levels of 15 thousand barrels per day.

New infrastructure for the field’s commercial development has been put in place. The CGS’s first line has been constructed with a capacity of 60 thousand barrels per day and in March 2014 the Badra field was connected to the 165–kilometre-long main Iraqi oil pipeline system.

Production in the field  will reach its peak of 170 thousand barrels per day (around 8.5 million tonnes per year) in 2017 and then remain the same for a period of 7 years.

Vadim Yakovlev, First Deputy CEO of Gazprom Neft said:

“Development at the Badra field is one of Gazprom Neft’s first international assets in oil production. We launched this project from scratch and over a short period of time have completed all of the complex work necessary for the industrial development of the Badra field. The experience of being an operator on this project has further strengthened Gazprom Neft’s expertise, which will contribute to work on other new projects, for example in the Near East and other regions where the company is exploring opportunities for further development.” 

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The Badra oil field is located in Wasit Province in Eastern Iraq.  According to preliminary estimates, geologic reserves at the Badra field amount to 3 billion barrels of oil.

The contract with the Iraqi government for development of the oil field was signed in January 2010 upon completion of a bid process. The winning bid was submitted by a consortium of companies consisting of Gazprom Neft, KOGAS (Korea), PETRONAS (Malaysia), and TPAO (Turkey). 

Gazprom Neft is the project operator.

Gazprom Neft’s share in the project is 30 percent, while KOGAS has 22.5 percent, PETRONAS has 15 percent, and TPAO has 7.5 percent.  The share of the Iraqi government, represented in the project by the Iraqi Oil Exploration Company (OEC), is 25 percent.  

Under the contract, investors will be reimbursed for costs incurred and paid a fee of $ 5.5 per barrel of oil equivalent produced. The Badrah development project has a projected lifetime of 20 years with a possible extension of five years.