Iraq has started crude oil production from a giant oil field in southern Iraq for the first time, in a bid to increase the country’s crude output, an official with the South Oil Co. said.

“We have started experimental production from Nassiriyah oil field at a rate of 10,000 barrels a day,” the official told Dow Jones Newswires. He expected production to increase gradually to 20,000 barrels a day within the next few days.

Fayadh al-Naama, head of the South Oil Co., said production from the oil field is expected to hit 50,000 barrels a day in a year. Production from the field came after the SOC managed to rehabilitate five wells and connecting them to a degassing station, Naama said.

Nassiriyah, which accounts for some 4.3 billion barrels, was discovered in 1975 and remained undeveloped for more than three decades due to war, lack of cash and economic sanctions. The field, whose production capacity could reach 300,000 barrels a day if it is properly developed, is currently subject to direct negotiations between the Iraqi oil ministry and three oil companies: Italy’s Eni SpA (E), Japan’s Nippon Oil Corp. (5001.TO) and Spain’s Repsol YPF SA (REP).

Nassiriyah’s new production is part of a “crush plan” proposed by the Iraqi Oil Ministry earlier this year to increase production from southern oil fields by 350,000 to 500,000 barrels a day in two years.

Iraq’s southern oil fields are currently producing around 1.8 million barrels a day.

Naama also said production from the giant Nahr Bin Umar oil field increased by 20,000 barrels a day from the previous 25,000 barrels a day. Total SA (TOT) along with U.S. Chevron Corp. (CVX) and StatoilHydro ASA (STO) are negotiating with the ministry a contract to develop Nahr Bin Umar, which has proven reserves of 6.6 billion barrels.  

(Dow Jones & Rigzone)