Mesopotamia Petroleum Confirmed Out Of Iraq Drilling Venture
Oct/17/2009 | Under Crude Oil - Oil and Gas Drilling - Petroleum
The head of the state-run Iraqi Drilling Co. said a joint venture with UK-listed Mesopotamia Petroleum Co. is officially over.
Idriss al-Yassiri, director general of the IDC, also told reporters on the sidelines of an energy conference here Friday its 150-well drilling plan for 2010 could contribute a quarter million barrels per day.
“They didn’t stand up to their end of the deal,” Yassiri, said of MPC. “It is finished … we are divorced.”
The joint venture was announced with fanfare last December during an energy expo in Baghdad.
MPC, a venture between U.K.-listed Ramco Energy and Midmar Energy, finalized the deal in February.
Soon after there were rumblings in the Oil Ministry that MPC hadn’t secured the $44.1 million in seed capital to keep its 49 percent stake in the company and in July it was terminated.
Since then multiple sources confirmed to Iraq Oil Report negotiations continued to restart the venture. At the time of cancellation MPC issued a statement that it should have received an extension, according to the contract. The company had no comment when it was contacted Friday.
Yassiri said IDC is looking for other companies to partner with but wouldn’t name those in negotiation now.
IDC plans to drill 150 wells in 2010 which, depending on the final count and the technical difficulties of the wells, could add 250,000 barrels per day (bpd) to Iraqi production.
Most of the wells will be drilled for the state-run South Oil Co., but Yassiri said there will be work with the North Oil Co. and Missan Oil Co. MOC recently awarded a 30-well contract to the IDC.
Yassiri said 24 rigs were added to the companies collection this year at a cost of between $12 million and $35 million each. He said owning the rigs is less expensive, and cuts costs when subcontracting the work.
“Just to rent one rig will cost you a million dollars a month,” he said.
The IDC has 33 drilling and workover rigs working now, aims to bring a total of 53 online by the end of the year and a total of 60 by the end of next year.
“We need maybe to double or triple the rigs in the future to maintain this very ambitious program for the oil industry,” he told the conference.