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CNPC in Iraq

CNPC commenced oil negotiation with Iraq since 1997 and signed a service contract on the development of Al-Ahdab Oilfield with the Iraq's Ministry of Oil in November 2008. CNPC also provides oilfield services in the country.
  • Oil and Gas Operations
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In June 1997, Al-waha Petroleum Co., Ltd, a joint venture of CNPC and China North Industries Corporation, signed an agreement with Iraq's Saddam Hussein government to develop the al-Ahdab oil field, which was postponed by the UN sanctions on Iraq and the following U.S.-led invasion to the oil-rich state. In November 2008, CNPC signed a Development Service Contract of Al-Ahdab Oilfield with Iraq's Ministry of Oil.

In the first and second rounds of international oil/gas bidding in 2009, CNPC joined forces with BP in winning the operating rights to Rumaila, and with Total and Petronas in winning the contract for Halfaya. In 2013, we acquired a 25% stake in Iraq's West Qurna-1 oilfield from ExxonMobil.

In 2015, our Iraqi company produced more than 57 million tons of oil by continuous waterflooding.

Al-Ahdab Oilfield

Located 180 kilometers southeast to Iraq's capital city of Bagdad, Al-Ahdab Oilfield has a structural area of about 200 square kilometers. As stipulated in the contract, CNPC will apply advanced development technologies to meet the benchmarks of 25,000 barrels/day of oil within the first three years and 115,000 barrels/day of oil by the end of sixth year. After the oilfield go on stream, it will supply some of the produced oil to fuel the nearby power plants to ease the power shortage in Iraq.

In 2011, the project at Al-Ahdab Oilfield built an annual capacity of 6 million tons, making it the first new oil project to start production in Iraq over the past two decades.

In 2012, the project maintained smooth operation with the capacity to produce and process 6 million tons of oil and 800 million cubic meters of natural gas annually. The rapid increase in production at Al-Ahdab met the oil needs of the power plant and refinery in Baghdad. In addition, high-standard waste mud treatment technology was introduced to the project, which can extract more than 99% of the oil from oil sludge. The treated effluent, meeting Iraq National Class I-B, can be used for irrigation and fish cultivation. This treatment technology is highly recognized by the Iraqi government, which requires it to be used in other projects.

In 2013, the Al-Ahdab Oilfield maintained an output of 135,000 barrels per day and cumulatively produced more than 10 million tons of oil since its inauguration in June 2011. With a diverse oil and gas transport network consisting of pipelines, LPG loading stations, and oil loading stations, it helped to increase the local energy supply capacity.

In 2014, the Al-Ahdab project reversed its decline in oil output by building ESP wells, converting oil wells to water-injection wells, and optimizing mature wells. In 2014, it produced 7.08 million tons of oil, of which 6.93 million tons were exported.

Rumaila Oilfield

Rumaila Oilfield is located 50 kilometers west to Basra in South Iraq, covering an area of 1,800 square kilometers. Discovered in 1953 and been operational in 1972, Rumaila is the largest oilfield in Iraq and the 6th in the world, with oil reserves of about 17 billion barrels.

On November 3, 2009, CNPC, and British Petroleum (BP), inked a technical service contract with Iraq's State Oil Marketing Organization (SOMO) and South Oil Company (SOC) in Baghdad to expand production Iraq's Rumaila Oilfield. CNPC and its partners will expand Rumaila's daily productivity to 2.85 million barrels from the current 1.1 million during a six year period, which will help Iraq rebuild its economy.

In 2010, the Rumaila Field Operating Organization (ROO), a consortium by CNPC, BP and Iraq's South Oil Company, took over operation management and commenced operation in the oilfield. Over the course of the year, a total of 41 wells were drilled, 103 workovers completed, and 122km of flowlines laid. The initially targeted 10% increase of daily oil production was met in December, 2010, thanks to the commencement of production at new wells and optimization of production parameters.

In 2012, the joint project maintained a rapid increase in oil output thanks to enhanced reservoir study and stimulation measures. The average daily output of Rumaila accounted for 44% of Iraq's daily total.

In 2013, the project achieved an output of 1.36 million barrels per day. In 2014, the project mitigated a production decline through optimized management and intensified pace of converting oil wells to water injection wells.

In 2016, preliminary work was carried out smoothly on the newly signed renovation project for Basra Gas.

Halfaya Oilfield

Halfaya oilfield, situated in southern Iraq, has estimated reserves of 4.1 billion barrels of oil. In the second round of international oil/gas bidding in Iraq in 2009, CNPC joined forces with Total and Petronas in winning the contract for Halfaya.

In January 2010, the service contract was formally signed for the Halfaya Oilfield, which is operated by CNPC in consortium with Total, Petronas, and Iraq's Missan Oil. The terms of the contract require the consortium to increase daily output to 535,000 barrels per day, with CNPC as the operator. In December 2010, 3D seismic acquisition was formally commenced and the first batch of three horizontal appraisal wells with the designed depth of more than 4,000m were spud in.

In 2011, the project was well underway, with seismic prospecting, drilling, and surface engineering rolled out. In fact, the project was recognized by the Iraqi Ministry of Oil the one with the “fastest progress and best construction quality” among of the awarded projects in the second round of international bid invitation.

In June, 2012, the 5 Mt/a capacity building project in Iraq’s Halfaya Field, in partnership with Total, started production and delivered crude oil ahead of schedule.

In 2013, we worked with Total and other partners at the Halfaya project to optimize production management and deploy multilateral horizontal drilling. Oil production remained at more than 100,000 barrels per day, and Phase-II construction commenced.

In 2014, Phase-II construction of the Halfaya project was put into production ahead of schedule, pushing the daily output of the oilfield to the designed 200,000 bbl/d, and construction of Phase-III project commenced.

CNPC provides a range of oilfield services in Iraq, including seismic data acquisition, well drilling, well logging and testing.

In June 2005, CNPC signed a contract with Norway's DNO on drilling 3+6 wells with a "50D" drilling rig. We entered the market in northern Iraq at the end of 2005 and provide well logging and testing services to DNO and ADDAX. In 2006, CNPC completed two seismic data acquisition projects for DNO.

In 2009, seismic exploration and drilling operation had been deployed in Iraq's Ahdab Oilfield. The first horizontal well AD010H completed at a depth of 3,550 meters, with the horizontal interval of 848 meters. The core recovery rate reached 97.58%, the highest in the region. In 2012, we renewed well logging, mud logging, and testing operation contracts with the Halfaya and Al-Ahdab projects,

In 2013, Daqing Drilling Engineering Company EPC-contracted 38 wells as part of the Rumaila project, and was recognized by the owner for its 100% satisfaction in terms of borehole and cementing quality. At Halfaya Oilfield, the Phase-II surface engineering project saw smooth progress, and construction began at the crude export pipeline as part of Phase II of the Halfaya Project. In addition, China Huanqiu Contracting & Engineering Corp. won an EPC contract for Iraq's KAR Refinery, and China Petroleum Pipeline Bureau won contracts for the gathering and transport system at LUKOIL's West Qurna-2 Oilfield in Iraq.

In 2014, we won the bid on general drilling services for Rumaila Oilfield; the Phase-II surface engineering work for capacity building of Halfaya Oilfield was put into production as scheduled; the surface engineering work of Al-Ahdab Oilfield proceeded as planned, and the KAR Refinery was reconstructed as planned.

Additionally, CNPC's subsidiary CPP has made considerable progress in Iraq in 2014. The Phase-I of the Badra gathering and transportation project, the first comprehensive oilfield surface construction work independently contracted by CPP, was put into production. The company completed and made operational the Badra Export Pipeline and proceeded with construction of the Majinoon FCP Gas Pipeline. CPP also began constructing a 25kcm crude storage at Rumaila Oilfield, and won contracts for the Nassiriya oil storage project in the country.

In 2015, we completed and put into operation Halfaya export pipeline, and steadily pushed forward Badra Crude Gathering and Transportation Pipeline and Majinoon FCP Gas Pipeline. Our Great Wall Drilling Company finished the drilling of well Ga-E31P 16 days ahead of schedule in its EPC-contracted Block Garraf in Iraq. The company recorded the quickest drilling and completion of highly-deviated directional wells with an inclination of over 40° in the block.

In Iraq, CNPC makes great efforts to promote local economic development, create jobs, and protect the environment. In addition, we also provided educational support, medical equipment and other public utilities for local communities.

Green development

In our Al-Ahdab project, we supplied gas to the local power station free of charge to alleviate power shortages; we also put into operation LPG devices in advance to meet local demand for fuel. In addition, high-standard waste mud treatment technology was introduced to the project, which can extract more than 99% of the oil from oil sludge. The treated effluent, meeting Iraq National Class I-B, can be used for irrigation and fish cultivation. This treatment technology is highly recognized by the Iraqi government.

The associated gas produced at the Halfaya Oilfield was delivered to the Kahla power plant, making it the first in Iraq to generate power through associated gas.

In 2012, we protected the local ecological environment by investing around RMB 400,000 in forestation in Al-Ahdab.

Staff localization and training

We actively employ Iraqi people in our oil and gas cooperation projects, and have created a total of USD 400 million worth of business opportunities and more than 20,000 jobs for the local community. Meanwhile we have set up training centers and work with local colleges and universities as part of our ongoing efforts for employee development. Each year, we spent USD 5 million in training local people, to cultivate technical and management personnel in oil exploration, development, production, pipeline construction and surface engineering construction. Specifically, we have launched cooperation on education, research and training between the University of Basra and the China University of Petroleum (Beijing), which was aimed at improving the skill levels of local employees and preparing young talents for a career in the local oil industry.

During the capacity building of the Iraqi projects, we appointed a tutor or co-worker to each local employee to improve their operating skills. In 2011, the Al-Ahdab project offered more than 2,000 jobs to local residents. A production internship base was opened up together with Baghdad University of Technology to provide Iraqi college students with internship opportunities. In August, 2011, CNPC organized the first selection campaign of eight outstanding Iraqi employees and 44 excellent Iraqi employees.

In addition, Daqing Oilfield Company has set up an integrated training center to provide the Iraqi employees with a wide range of training courses on drilling, business management, HSE management, language skills and culture etc. By the end of 2013, we had launched a total of 58 training courses, training 2,035 local employees. This not only improved local employees’ skills and work efficiency, but also enhanced their sense of identity and belonging.

At the training center of the CNPC-affiliated China Petroleum Engineering and Construction Corp (CPECC) in Iraq, more than 110 local workers have mastered welding skills. In 2013, this training center was authorized by South Oil Company (SOC) to provide training services on petroleum engineering for SOC employees. In addition, CPECC signed a MOU with the University of Basrah to recruit 40-50 college students annually over the next four years to work in the company's local projects.

In 2015, we launched cooperation on education, research and training between the University of Basra and the China University of Petroleum (Beijing), which was aimed at improving the skill levels of local employees in Iraq and cultivating young talents for the local oil industry.

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Public welfare and community development

We actively participated in social welfare projects to promote local infrastructure, culture, education, and health. Specifically, we have built roads and bridges, donated educational materials, and entered into agreements with training agencies to benefit local people.

We subcontract works to local firms as long as they could fulfill them. In the Halfaya project, the camp site construction, equipment foundation works, bounding walls, roads, and other construction projects were subcontracted to BURJ, SANIDA, BA and other local companies.

On September 3, 2010, we gave holiday gifts to children at Basra orphanage and provided air-conditioners, stationery and recreational items in order to improve their living and learning conditions. In 2012, we donated RMB 372,000 and provided RMB 279,000 for the "Star of Hope" scholarship at the University of Basra.

In 2013, sponsored by CNPC, 28 members of Iraq's national swimming and diving teams arrived in Beijing for a month's intensive training. We also invested RMB 2.83 million to help build classrooms and playgrounds for schools in Kut City, Wasit Province, Iraq. As of the end of 2013, we invested a total of more than USD 4 billion in the country and provided more than USD 300 million worth of business opportunities for local people, contributing to the oil industry's revitalization and the economic recovery of Iraq.

In addition, we have established the Community Contribution Committee for Ahdab Oilfield Communities, which is composed of representatives from Midland Oil Company, and the local government and parliament. We provide public welfare and assistance to community residents through the committee, and supervise the implementation of such welfare projects. In 2014, we completed construction of schools, clinics and other projects in Ahrar County, Kut City, Wasit Province of Iraq, and these projects were well received by local residents.

In order to enhance communication with local communities, we invited local students from primary schools, middle schools as well as colleges and universities to visit Halfaya Oilfield. Halfaya Oilfield has become a base for education and practice where students could better understand the development of the oilfield and the local changes brought about by it. By the end of 2014, nearly 1,000 students had visited the oilfield.

In 2015, in order to raise the security awareness of the Halfaya community, together with Missan Oil Company, we carried out a three-month security education activity for the students of seven schools in eight villages around the Halfaya oilfield.

In 2016, we launched safety education campaigns for 18 schools in the oilfields and surrounding communities.

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Aug. 18 2014 The second phase of CNPC's 10Mt/a Halfaya Project in Iraq began to deliver crude oil. The project consists of a 272km-long transportation pipeline, a 5Mt/a crude processing center, pumping stations, and 43 wells to be drilled and completed.

Nov. 7, 2012 A gas processing plant went on stream at Al-Ahdab. Comprising two 2,000m3 LPG spherical tanks and one LPG loading station, as well as associated facilities and safety control systems, the plant has a daily capacity of 400 cubic meters.

Jun. 21, 2011 The Al-Ahdab Oilfield (phase-I) became operational with a 3-million ton annual capacity. This is the first new oil project to start production in Iraq over the past two decades.

Jul. 1, 2010 The operation management rights of Rumaila project was officially handed over to ROO, which is jointly established by BP, CNPC and Iraq South Oil Company.

Jan. 27, 2010 PetroChina, a holding company of CNPC, formed a consortium with Total, Petronas and Iraq South Oil Company in signing a 20-year development and production service contract with Iraq's Missan Oil for Halfaya Oilfield. PetroChina owns 37.5% of the equity and acts as the operator.

Dec. 11, 2009 At the second round of international bidding for Iraqi oil and gas fields, a consortium by CNPC, Total and Petronas wins the Halfya oil field service contract.

Nov. 3, 2009 A service contract for Rumaila oilfield was signed between CNPC, BP and Iraq's State Oil Marketing Organization (SOMO) in Baghdad.

Jun 30, 2009 The China National Petroleum Corporation (CNPC)/BP alliance is awarded a tender in the first round of the international bidding for Iraq's oil & gas fields. The two bidders jointly win a service contract to develop Iraq's Rumaila oilfield.

Jun. 30, 2009 CNPC/BP alliance was awarded a tender in the first round of the international bidding for Iraq's oil & gas fields. The two bidders jointly won a service contract to develop Iraq's Rumaila oilfield.

Nov. 10, 2008 A service agreement is signed with Iraq's Ministry of Petroleum on the development of the Al-Ahdab Oilfield. Under the agreement, CNPC will increase the oilfield's production capacity to 25,000 barrels per day within three years, and to 115,000 barrels per day within six years.