18/09/2013 08:45:00

BP Gets $4.5 Billion Payment for Iraq Field Investment

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By Barbara Kollmeyer, MarketWatch MADRID (MarketWatch) ..

Oil Major BP PLC (BP) received a total of $4.5 billion until the end of 2012 for its investments in Iraq's supergiant Rumaila oil field in southern Iraq, a senior Iraqi oil official has said.

BP and partner China National Petroleum Corp., or CNPC, are developing the 17-billion-barrel Rumaila. The field, Iraq's largest, is currently pumping around 1.4 million barrels a day and it is expected to hit 2.1 million barrels a day in 2017.

Abdul Mehdy al-Ameedi, head of the Oil Ministry's petroleum contracts, made no mention of how much was paid to CNPC that won the deal along with BP to develop the field near Basra in 2009.

Baghdad has paid a total of $8.5 billion until the end of 2012 to companies working in Iraq, Mr. Ameedi told the Wall Street Journal on the sidelines of an Iraqi oil meeting in Amman late Tuesday night. Among the paid firms should be U.S. energy giant Exxon Mobil Corp. (XOM) and Italy's largest oil producer, Eni SpA (E), which are developing West Qurna-1 and Zubair oil fields in southern Iraq respectively.

He gave no details of how much precisely each company was paid except for BP.

BP, Exxon Mobil and Eni and their partners have invested billions of dollars to upgrade these three supergiant fields.

"Total costs spent by these firms as well as accumulated remunerations from producing oil from these fields have reached between $16 billion and $17 billion," Mr. Ameedi said.

The three fields are among a number of oil fields Iraq auctioned off to international oil companies in 2009 under service contracts, which stipulate that the firms start to be paid to recover costs once they boost production by 10% above an agreed baseline production.

Write to Hassan Hafidh at hassan.hafidh@WSJ.com

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

(END) Dow Jones Newswires

September 18, 2013 03:45 ET (07:45 GMT)

Copyright (c) 2013 Dow Jones & Company, Inc.

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