BP seeks to change terms of Iraq oilfield contract

BP is looking to change the terms of its contract with the Iraq government for the Rumaila oilfield, as it seeks to scale back its production target.

The British oil giant won a deal to develop Iraq's largest oilfield in 2009 and as part of its offer BP proposed to raise Rumaila's production to 2.85m barrels per day. At the time many analysts thought the target was too ambitious.

As part of the negotiations, BP says it will present a suite of options to the government, ranging from a plateau production target of slightly below 2m b/d to the original objective of 2.85m b/d.

“We aim to discuss and agree a full field development plan for Rumaila in 2013,” a spokesperson for BP said today.

“Any discussions we have with the government are commercially confidential.”

Michael Townshend, BP’s head of Iraq, has said in recent weeks that daily output from Rumaila is expected to increase by about an average of 100,000 barrels in each of the next three years, which is before the full-field development plan kicks in.

The 2012 average is expected to be about 1.35 million b/d, BP said.

In the first year of the deal BP managed to increase production at Rumaila by 10pc more than expected. After a year of work, output was running at about 1.2m barrels per day 100,000 barrels ahead of the earlier output.