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(Adds BP comment, details, quotes, background)
By Aref Mohammed
BASRA, Iraq, Sept 4 (Reuters) - Iraq signed revisedcontracts with foreign oil companies for two southern oilfieldson Thursday that reduced their production targets and extendedthe life of the deals, Iraqi oil officials said.
The revised deal with oil major BP for Iraq's giantRumaila oilfield cut the planned plateau level to 2.1 millionbarrels per day from 2.85 million bpd, Salah Mohammad, generalmanager of the Rumaila Operating Organisation, told Reuters.
Iraq also agreed with China's CNPC to slash the final outputtarget from the Halfaya oilfield to 400,000 bpd from 535,000bpd, Adnan Noshi, head of state-run Maysan Oil Co, said.
Iraq had set an overall production capacity target of 12million bpd by 2020, which would rival that of top oil exporterSaudi Arabia, after it signed service contracts in 2009-2010 todevelop its southern oilfields.
Oil majors working in Iraq include BP, leader at Rumaila;ExxonMobil, in charge of West Qurna 1; and Royal DutchShell, operator of Majnoon.
But crumbling infrastructure, red tape and a lack of clearoil legislation have stunted investor interest. Iraq hasrepeatedly failed to reach its ambitious targets, and currentoutput from the southern fields is around 3 million bpd.
Baghdad has reduced the overall capacity target to 8.5-9million bpd and returned to the negotiating table to discussrevised plateau production rates with oil companies.
NEW GOALS
Rumaila, the workhorse of Iraq's oil industry which BPoperates with CNPC, has estimated reserves of 17 billionbarrels. It currently produces around 1.3 million bpd, Salahsaid, adding he expected that output level to remain steady forthe rest of the year.
Officials from BP and Iraq's oil ministry signed theamendment to the existing contract, originally agreed in 2009,in a closed-door meeting at Rumaila on Thursday.
"Iraq and BP have reached an agreement to cut Rumaila'sproduction target to 2.1 million bpd," Salah said.
"It was (also) agreed to extend the timeframe to reach thenew final production of 2.1 million bpd to 10 years from sevenyears that had been agreed upon before," he added.
A BP spokesman said that under the amendment to the existingtechnical service agreement, the partners "plan to raise plateauproduction by about 800,000 b/d within the next decade to some2.1 million b/d".
CNPC, operator of Halfaya, is developing the field withFrance's Total and Malaysian state company Petronas.
Maysan's Noshi said Halfaya's amended contract had beenextended to 30 years from 20. Halfaya currently produces 200,000bpd and it is expected to boost output to 230,000 bpd by the endof this year, he added.
Iraq's giant southern fields have not been affected byBaghdad's fighting with Islamist insurgents. (Reporting by Aref Mohammed; Additional reporting and writingby Rania El Gamal; editing by Jane Baird)
