New Rumaila contract includes substantive changes
A new contract for Iraq's most prolific oil field lowers output, extends the life of the deal, and gives BP and CNPC a larger stake.
SOC Director General Dhia Jaffar, center, with Iraqi and BP officials at a Sept. 4, 2014 signing ceremony for an amendment of the Rumaila contract. Jaffar has been nominated as a new deputy oil minister for refineries. (ALI ABU IRAQ/Iraq Oil Report)
RUMAILA - Iraq has renegotiated a lower production target for Rumaila, its most prolific oil field – part of a broader effort to moderate the country's oil ambitions, keeping them in line with expected market demands and domestic infrastructure constraints.
The amendments to the Rumaila contract go beyond lowering the production plateau target and extending the life of the deal. Most importantly, BP and CNPC now hold a larger stake in the project, and they have added a contractual provision that protects the companies in case Iraq cannot supply the water needed to boost production as planned.
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