April 16 (Bloomberg) -- Schlumberger Ltd. will invest an initial $100 million in a base camp at Iraq’s Rumaila oilfield and a drilling joint venture in the country as improving security boosts expectations of a revival in oil output.
The funds will be used for a camp of 300 people and a venture with state-owned Iraqi Drilling Co., with which it has a share in $500 million of services contracts at the BP Plc-led Rumaila field, Stephen Whittaker, a spokesman for Houston-based Schlumberger, said by e-mail.
Oil-service providers are returning to Iraq after the government signed 10 contracts for oilfield development, seeking to boost production after years of war and sanctions destroyed the industry. BP has said Rumaila may become the world’s second- largest producing field by 2015.
Schlumberger’s joint-venture contract is for drilling wells and providing associated technical services including wireline logging, cementing and pressure pumping, Whittaker said.
BP has committed to raise production at Rumaila to 2.85 million barrels a day from a baseline of 1.07 million barrels a day. The company is seeking to increase output by 10 percent in the first phase, allowing it to begin to recover costs. Other service providers with contracts at Rumaila include Weatherford International Ltd.
Iraq plans to boost production to about 12 million barrels a day within the next six years from 2.5 million. Other major fields have been awarded to Exxon Mobil Corp., Royal Dutch Shell Plc and Italy’s Eni SpA.
Schlumberger sees oil opportunities in Iraq on “a similar scale” to Saudi Arabia, Whittaker said. The company, the world’s largest oil-services provider, has been drilling in Saudi Arabia in a venture with a local company for 50 years.
Work in Iraq will require about 100 drilling rigs in total, according to Schlumberger estimates.
--Editors: Amanda Jordan, Jonas Bergman
To contact the reporter on this story: Stanley Reed in London at sreed13@bloomberg.net
To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net
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