ABU DHABI, Nov 10 (Reuters) - Operations at Iraq's biggestoilfield, Rumaila, have not been affected by sliding oil pricesand the government's battle against Islamic State militants, asenior executive at developer BP said on Monday.
Under a service agreement signed between Baghdad, BP and itsChinese partner CNPC to develop Rumaila, the companies willboost production to 2.1 million barrels per day (bpd) by 2024.Investments in the fields are made by the foreign oil firms, whothen receive pay-per-barrel remuneration fees.
Iraq's finance minister said this month that the cost offighting Islamic State was undermining efforts to keep thecountry functioning and that the government had not been able topresent a 2014 budget to parliament yet.
At the same time, oil prices have fallen from $115 a barrelin June to around $83 on Monday. Baghdad's fiscal breakevenprice in 2014 is $109.4 a barrel, according to the InternationalMonetary Fund.
The contract is one in a series of deals signed withinternational oil companies to raise Iraq's output capacity toaround 8.5 million bpd by 2020. Industry sources have said therehave been some minor delays in Baghdad paying remuneration fees.
However Michael Townshend, president of BP in Iraq, in AbuDhabi, said production at Rumaila had not been affected by theoil price drop or the security situation.
"We have not had delays," he said, referring to paymentsfrom the government.
"Down in Rumaila work is going on. We never pulled outduring the year, we just kept work ongoing, and that has beenactually largely unaffected by the security situation," he said.
Current output from Rumaila is around 1.3 million bpd.
BP also has an agreement with the Ministry of Oil to helparrest declining production at the giant northern Kirkuk field,currently being disputed between Baghdad and Iraq's autonomousKurdish region.
Under the deal, BP works on the Baghdad-administered side ofthe border, on the Baba and Avana geological formations.Kirkuk's third formation, Khurmala, is controlled by theKurdistan Regional Government.
In July, Kurdish forces seized the field. The Kurdish regionhas started to pump crude from the Avana dome.
Townshend said BP still had contractors in Kirkuk and thatsome parts of the field remained under the administration ofBaghdad and were being operated by state-run North Oil Company(NOC).
"We still work with NOC and the Ministry of Oil. We stilladvise them on Avana and Baba domes," he said. (Reporting by Rania El Gamal, Maha El Dahan, Marin Dokoupil andStanley Carvalho; Editing by Pravin Char)