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Eni expands capacity in Iraqi oil

Development comes as Iraq calling on oil companies to curb spending in the south.
By Daniel J. Graeber Follow @dan_graeber Contact the Author   |   March 3, 2016 at 8:31 AM
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MILAN, Italy, March 3 (UPI) -- More capacity was added to operations associated with the Zubair oil and gas field in southern Iraq, Italian energy company Eni said Thursday.

Eni and its Zubair partners with the Korea Gas Corp. joined Deputy Minister of Oil Fayadh Hassan Nima and other representatives to launch operations at three generation facilities at the southern Iraqi field.

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"The plants, which together with those existing, restructured and modernized, have increased the oil and gas treatment capacity to about 650,000 barrels per day," the Italian energy company said in a statement.

Eni operates the field on behalf of the state-backed South Oil Company of Iraq. Field production is estimated at 360,000 bpd, with plans to stimulate that by more than twice that level during the next few years.

According to a briefing from the U.S. Energy Information Administration, the Iraqi government called on energy companies working in southern Iraq to cut back on spending this year because federal coffers were under pressure from lower crude oil prices. Oil export revenue of $49 billion last year was 41 percent less than for 2014.

"EIA expects Iraq's production growth to slow in 2016 because of constraints arising from reduced export revenue," it said in a briefing last week.

Iraq was the second-largest contributor to global oil supply growth last year. Excluding the semiautonomous Kurdish north, southern Iraq accounts for about 90 percent of all of the oil produced in the country.

Equity production attributed to Eni last year was around 40,000 barrels of oil equivalent per day.

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