March 15, 2009 / 11:53 AM / in 10 years

Iraq tenders for Halfaya oil production facility

BAGHDAD, March 15 (Reuters) - Iraq has issued a tender for international oil companies to build a 50,000 barrel-per-day production facility on an untapped southern oilfield whose reserves are estimated at about 5 billion barrels.

A statement posted on state Maysan Oil Company’s website invited bidders to build the facility and install dehydration and desalination units for processing the crude. The tender closes on March 25.

Halfaya is classed as a “super giant” oil field with about 5 billion barrels of oil reserves. It is among the fields that were offered to foreign oil firms in a second bidding round announced by Iraq last year.

Iraq’s Oil Ministry and British firm Mesopotamia Petroleum Company signed a joint venture on February and the first drilling activity will be in the southern oil fields of Bazargan, Fakka and Halfaya.

The prized Halfaya oilfield has an estimated production capacity of 250,000 barrels a day, according to Oil Ministry.

The government of Prime Minister Nuri al-Maliki is courting top foreign firms for long-term service contracts for major oil and gas development fields.

It hopes that, as violence recedes in most parts of Iraq, foreign investors will set aside security concerns and flock to the country, which has the world’s third biggest proven reserves.

Iraqi oil production now stands at 2.4 million barrels per day, below levels before the United States-led invasion, but the government hopes to more than double that figure to generate funds for reconstruction after decades of war and sanctions.

The new Halfaya tender, which would build facilities to process the crude at the field before it is piped offsite, is part of Iraq’s plan to accelerate steps to boost its production.

Iraq inaugurated an oil project on Wednesday with the Chinese National Petroleum Company for a field in the southeastern province of Wasit, activating the country’s first major oil deal with a foreign firm since the fall of Saddam Hussein in 2003. [ID:nLB369659] (Reporting by Ahmed Rasheed; editing by Tim Cocks and Karen Foster)

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