Iraq’s Basra Oil Co. said Feb. 27 it is preparing to tender for a water injection project vital to increase its oil production capacity if talks with ExxonMobil (NYSE: XOM) fail, the head of the oil ministry’s licensing and contracts office said.
“We cannot wait for a longer time unless ExxonMobil accepts the deal for the benefit of the two parties,” Abdul Mahdi al-Ameedi told reporters on the sidelines of the CWC Iraq Petroleum Conference in Berlin.
Iraqi Oil Minister Jabar al-Luaibi said in October Iraq was in final talks with Exxon on developing the project, which consists of building oil pipelines, storage and a mechanism to inject water from the Gulf into oil reservoirs.
Al Ameedi said part of the delay in negotiations with ExxonMobil and Petrochina Ltd. (NYSE: PTR), another interested party, related to IP rates from the Nahr Bin Umar and Artawi oil fields.
“In the beginning when we discussed with them, the initial production rate from the two fields was in the order of 40,000 barrels per day, but now it is more than 125,000 barrels per day,” Ameedi said.
“This will impact severely the economics of the project ... it affects the economics parameter, the profit share or the profit to the company.”