Italy's SICIM Secures $358.8 Million Iraq Zubair Oil Field Deal - Spokesman
09/18/2012| 11:23am US/Eastern
By Hassan Hafidh
Iraq and Italy's largest firm in oil production, the Eni SpA (E) group, on Tuesday awarded a deal worth up to $358.8 million to SICIM SpA, an Italian company that builds and installs oil pipelines, an Iraqi government spokesman said.
Ali Al Dabbagh said that the deal was approved by the Iraqi cabinet at its weekly meeting Tuesday. SICIM SpA has won the deal in partnership with the United Arab Emirates-based Drake & Scull International, he said in a statement.
The statement didn't elaborate on SICIM's plans for Iraq's giant Zubair oil field, and the spokesman couldn't be reached for comment. But the consortium clearly aims to set up a network of pipelines linking the field with the export facilities in southern Iraq.
The 20-year Zubair service contract was awarded at an Iraqi licensing auction in 2009 to the Eni-led group, which includes U.S. Occidental Petroleum Corp. (>> Occidental Petroleum Corporation) and Korea Gas Corp. (>> Korea Gas Corp), or Kogas.
The Zubair field--one of the largest of Iraq's oil fields--was producing 195,000 barrels a day before it was awarded to the Eni-led group. Production has since reached about 300,000 barrels a day and is expected to rise to a plateau of 1.125 million barrels a day in 2016, once the full field-development plan is completed.
In June this year, ENI-led group awarded U.S. giant Weatherford International Ltd. (>> Weatherford International Ltd) a crucial $843 million deal to build six initial production facilities each with 50,000 barrels a day capacity. The facilities would boost oil production from Zubair by some 300,000 barrels a day.
-Write to Hassan Hafidh at email@example.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires