BAGHDAD, (Reuters) – Exxon Mobil has been picked to lead a “multibillion-dollar” water-injection project on behalf of international oil companies that won contracts in southern Iraqi oilfields, an official said on Monday.
The cost of the project would be distributed among those majors that won development contracts for southern oilfields in the two auctions Iraq held last year, said Abdul-Mahdy al-Ameedi, director of the Oil Ministry’s licensing office.
Water injection helps to increase the amount of crude that can be pumped from oilfields and will be a key to enabling the oil firms to reach ambitious production targets set in the oilfield development contracts.
“The cost of this super giant project will be in the multi-billion dollars,” Ameedi told Reuters.
“The super giant project will have the capacity to inject 12 million barrels per day of water from the Gulf to deal with the issue of the shortage of water for injection into the wells in the southern fields.”
Ameedi said the companies that would help cover the costs of the water injection project included Exxon, Royal Dutch Shell, Lukoil, Malaysia’s Petronas, China’s CNPC and Eni of Italy.
Exxon was picked to lead the project at a meeting this month in Istanbul, he said.
“The companies will pay according to their stakes,” he said.
Iraq has signed 10 deals with international oil majors to develop some of its largest oilfields. The deals have the potential to boost Iraqi oil production capacity to Saudi levels of 12 million barrels per day from 2.5 million bpd now.
Ameedi said Iraq had argued that it would be more efficient and cost effective to have one company coordinate efforts by all to boost the amount of water that could be injected into reservoirs.