(MENAFN - Arab Times) Production at Iraq's supergiant Rumaila oilfield, developed by BP and China's CNPC , has fallen from peaks hit in December and early January, official figures showed, in what could be a sign of challenges ahead.
The field has a global profile with its over a million barrels per day output almost half of the OPEC member's output.
BP said in January production had increased by more than 10 percent above the 1.066 million bpd baseline rate agreed on in December 2009.
But output has ebbed and flowed since.
It has dropped as much as 280,000 barrels in a single day - or more than 10 percent of Iraq's total daily average output - from the 1.29 million bpd reached on Jan. 11, according to state-run South Oil Company documents obtained by Reuters.
Several wells were shut down in Rumaila last month, when output was slowing, due to back pressure at the wells, the official documents showed.
In most days, production was above 1.1726 million bpd but the wide fluctuations could signal the problems BP and CNPC face keeping up higher production levels at Rumaila.
Rumaila has 17 billion barrels in estimated crude reserves.
"BP is facing a real challenge in Rumaila. They hit a high production level so fast, but did they know output could slump faster?" said an official with South Oil Co who asked not to be named.
BP declined to comment on the output data. "We don't comment on production levels," said a spokeswoman in London.
An industry source familiar with work in Rumaila said there were many reasons behind the fluctuation including requests by Iraq to cut back crude production and raise gas output, in addition to taking some facilities off line for repairs and maintenance.
"It is not the reservoir pressure, it is not anything fundamental with the field," the source said. "The programme to increase production is still going ahead."
The BP-led consortium is drilling new wells, overhauling and connecting existing ones and installing electric submersible pumps to boost production and overcome the natural decline of the Rumaila field - estimated at around 15 percent per year.
In a possible indicator of Iraq's muted expectations for the rest of the year, Deputy Prime Minister for Energy Affairs Hussain al-Shahristani said in February that Iraq's 2011 average output would reach 2.75 million bpd. That was only 50,000 higher than the actual figure of 2.7 million announced by the oil ministry in January.
Meanwhile, Iraq's Oil Ministry spokesman says the country's largest refinery has reopened days after gunmen attacked the facility.
Asim Jihad tells The Associated Press the Beiji refinery resumed activities Friday morning.
Gunmen attacked the refinery early Saturday morning. They planted bombs and killed one person.
The attackers targeted the installation's North Refinery, which handles 150,000 barrels a day.
Iraqis rely heavily on the Beiji refinery for domestic consumption and any lengthy outage there would have risked long lines at the gas pump and electricity shortages.
Beiji is 155 miles (250 kms) north of Baghdad.
Meanwhile, production at Rumaila reached 1.27 million bpd on Dec. 26, 2010, compared to baseline production of 1.066 million bpd agreed in December 2009, a South Oil Co document showed.
On Jan 11, it hit 1.29 million bpd.
But in the second half of January production slumped, fluctuating between 1.178 million and 1.242 mln bpd and eventually falling back to 1.189 mln bpd at the end of the month.
In February, production ranged between 1.221 million bpd on Feb 22 at the high end and 1.009 million on Feb 27.
"Production varies from day to day, and even from week to week, in many oilfields, and Rumaila is no exception," an industry source close to the BP-CNPC consortium said.
But the SOC documents that tracked daily production showed that BP had to shut down many wells at Rumaila in February, due to back pressure at the wells.
"Opening choke valves to reach high production rates had a reverse impact, which is losing pressure at the oil wells and that is what is happening at Rumaila now," another oil official at SOC told Reuters.
"They have to race against time and use as much as they could of the electric submersible pumps to hold output steady," the official said.
Oil companies are grappling with decline rates in some of Iraq's oldest producing oilfields, such as Rumaila and West Qurna, the latter being developed by ExxonMobil.
Iraq is expected to start the first phase of a multibillion-dollar water injection project, led by ExxonMobil, to help boost crude production rates from its southern oilfields, in a month.
Service contracts awarded to foreign oil companies stipulate they start to be paid and to recover costs once they boost production by 10 percent above agreed baselines.
It was the increases at the Rumaila and Zubair fields that boosted Iraq's overall crude output to 2.7 million bpd - the highest level in two decades for a nation trying to recover from years of war.
Iraq's contracts with foreign firms could boost its output capacity to 12 million bpd by 2017, but most analysts say 6-7 million bpd is a more realistic target.
