Firms await Iraq oil contract award

MEED    31 July 2020 (Last Updated July 31st, 2020 15:05)

Firms await Iraq oil contract award

Contractors bidding for the estimated $800m contract to expand the degassing station for the Mishrif formation in Iraq’s Zubair field have told MEED that they are becoming increasingly concerned that the project could be delayed due to the Covid-19 pandemic.

The client on the project is a joint venture of Italy’s Eni and state-owned Basra Oil Company.

The project budget is expected to be around $700m-$800m minimum, according to one source.

Five companies submitted revised commercial bids for the contract on 31 August 2019:

  • Samsung (South Korea)
  • Saipem (Italy)
  • China Petroleum Engineering & Construction Corporation (CPECC; China)
  • Hyundai Engineering & Construction (South Korea)
  • Petrofac (UK)

The project’s scope includes the construction of five degassing station trains with the capacity to process 90,000 barrels of oil a day (b/d).

The company that wins the contract will also be required to install auxiliary production facilities, and heating, ventilation and air conditioning systems, as well as constructing associated facilities.

Eni has been present in Iraq since 2009 through its subsidiary Eni Iraq. It has a 41.6% stake in the Zubair field development project. Kogas has a 23.8% stake and BOC has a 29.7% stake.

Iraq’s oil and gas projects market has been hit hard by the Covid-19 pandemic with dozens of projects seeing work slowing down or being suspended.

Earlier in July, MEED revealed that work on a $121m tie-in project related to the West Qurna 1 oil field degasification station 7 (DS-7) in Iraq had been put on hold due to Covid-19.

US energy producer ExxonMobil, the project’s operator, awarded the contract for the project to state-owned China Petroleum Engineering & Construction Corporation (CPECC) in November 2019.

This article is published by MEED, the world’s leading source of business intelligence about the Middle East. MEED provides exclusive news, data and analysis on the Middle East every day. For access to MEED’s Middle East business intelligence, subscribe here.