Gazprom Neft has awarded a $329m engineering, procurement and construction (EPC) contract to Petrofac for the first phase of the Badra oilfield development project in the Wasit province of eastern Iraq.
The EPC contract, approved by Iraq's Council of Ministers, entails detailed design, engineering, procurement, construction, launch, testing and commissioning work of the Badra development's central processing facility.
The Badra oil field's central oil gathering and treatment station comprises three oil processing trains with a capacity of 60,000 barrels per day, each taking nearly 18 months to construct.
Gazprom Neft first deputy CEO Vadim Yakovlev said starting the construction of the oil gathering and treatment station and further development of oil field infrastructure is another key step in its plans for Badra.
"By the second half of 2013, we expect to begin producing oil at Badra with daily production reaching 170,000 barrels by 2017 or approximately 8.5 million tonnes of oil per year, as stipulated by our contract with the Government of Iraq," added Yakovlev.
Gazprom Neft, the development operator of the Badra oil field in Iraq, noted the first phase will commence soon and be completed in three 18-month phases by the second half of 2013, when oil production is expected to begin at the oil field.
Full capacity of 180,000 barrels per day at the Badra development will be reached in the second half of 2015 following the final completion.
The scope of work will also include building and installation of a pump station, oil storage facilities, an oil metering station, and other required equipment.
A consortium of Gazprom Neft, Korea's Kogas, Petronas and Turkey's TPAO will undertake the oil field development contract at Badra where preliminary estimates indicate geological reserves of 3 billion barrels of oil.
Gazprom Neft's stake in the project is 30%, with Kogas, Petronas and TPAO holding 22.5%, 15% and 7.5% stakes, respectively, while the Government of Iraq holds the remaining 25% stake in the project through the Iraqi Oil Exploration Company (OEC).
The $2bn Badra oil field development project is scheduled to be carried out for 20 years.