How many wells will be drilled at Cluster 4?

Twenty-eight. Sixteen wells will be drilled by the BHDC 37 rig and twelve wells by the BHDC 51 rig. Both rigs are made in China.

When was the drilling contract signed?

The contract was signed in August 2018. The contractor had 150 days to mobilize the rigs. We had to start both rigs by 9^th January. We started first rig on January 4^th and second rig on January 9^th.

What are the most important criteria for choosing a drilling contractor?

As you know, the tender process has two stages – technical and commercial. Both are very important.

On the technical side, we evaluate the bidders’ capability to provide high quality service. Quality and service readiness are the main factors.

On the commercial side, we look at the lowest bidder. For example, when we were looking for a contractor to drill the 28 wells, we sent invitations to 12 potential bidders. Six of them submitted proposals and five passed the technical qualifications. The contract then went to the company with the lowest price.

How much time does it take to get approval for contracts with the Iraqi Ministry of Oil?

It depends on the contract price. The higher the price, the more approvals are required, the longer the process. For each contract, we get a price range from the Ministry of Oil. The Ministry tells us what the approximate budget should be for such scope of work. To be approved by the Ministry, the contract should be within this range.

Are the estimations of the Ministry of Oil realistic?

Yes. Every year Iraq is getting more information about different projects. Back in 2012, they didn’t have enough data to evaluate the cost of each service and contract. Now it’s quite simple for them owing to the large number of IOCs working in Iraq. Those IOCs are able to provide Iraq with required services at an affordable price.

The contract for drilling 28 wells is but one of three that were recently signed by LUKOIL. Tell us about the other two.

The second contract for 26 wells was signed in January. The wells will be drilled at Cluster 9; two drilling rigs will also be utilized. All of the wells are extremely important for maintaining production at the Mishrif formation. The third contract is for three pilot wells at West Qurna-2’s Yamama formation.

How many wells in total you will have at Mishrif by 2021?

Right now, we have 142 wells. We are planning to drill 54 more by 2021. And we also have an ongoing tender for another 25 wells, that will be drilled later in 2020.

What’s special about Clusters 4 and 9?

We are the only company in Iraq that drills more than 30 wells per cluster. This is possible because we have two drilling rigs operating simultaneously at the well pad. This is normal in Russia, but not in Iraq.

We can move the rig from one slot of the well pad to another in a single day (there can be up to eight slots in total without major rig move for all rig facilities). Moving the rig from one well pad to another can take up to a month.

Thanks to experience in Russia, we know how to set up this kind of cluster. Usually this method is used on artificial islands built for drilling. The cost of building an entire island justifies having several rigs operating simultaneously.

How is the drilling process organized?

Firstly, we have to build the cluster itself. This includes slots (well cellars), concrete slabs for the skidding system, special places to collect cuttings (waste pits), a security perimeter, service facilities and an accommodation camp. We have to make sure that the cluster is ready to receive drilling rigs and has all of the necessary facilities for drilling works.

A cluster preparation can usually be completed within six months (civil works). Next comes the drilling stage. The drilling rig arrives at the cluster, gets assembled, tested by third party inspection and prepared for operations. The drilling process itself is complicated as we have to hit the targets that are 3-4 km away sometimes. We have different types of wells: horizontal, semi-horizontal, highly deviated wells.

How many people will be working on the projects?

For each project, a minimum of 90 people will be hired by the main contractor and another 60 by subcontractors. All of them will come from nearby areas, as required by the Basra Oil Company (BOC). I’m sure the actual number will be higher.

The contractors will submit requirements to the BOC and the BOC, in turn, will provide them with a list of candidates. Personnel will then be selected through an interviewing process.

The contractor for the first 28 wells has already hired 100 local residents: 75 from the BOC list and 25 from its own who used to work previously with them in WQ2 project and show a consolidated experience and knowledge. Hiring for sub-contractors is still ongoing.