Giant drilling companies Schlumberger AG (SLBS.VI) and Weatherford International Ltd. (WFT) as well as UnaRos, a joint venture of Italy's Rosetti Marino and privately held Unaoil, are competing for a crucial oil field facilities contract from an Eni SpA (E)-led group that will boost oil production from Iraq's Zubair oil field by some 450,000 barrels a day, contractors said.

They said Eni has been studying commercial and technical bids from the contenders, with an award expected in coming weeks.

"We have sent our final proposals and they (Eni and partners) will come back to us if there are any questions," a company executive told Dow Jones Newswires on the sideline of an Iraqi energy meeting in Istanbul, organized by the London-based CWC Group, late Thursday.

The contract involves building nine processing units, each with an output of 50,000 barrels a day. The initial production facilities, or IPF, tender will enable the Eni-led consortium to dramatically expand output from Zubair after about two years. Contractors estimate the value of the IPF contract at between $600 million and $800 million.

Eni is already pressing ahead with other aspects of the project. Three contractors are competing for the revamp of existing degassing stations in Zubair as part of early development work designed to handle associated gas from the giant field in southern Iraq.

South Korea's STX Corp. (011810.SE), and Italy's Techint and Tecnimont have submitted offers. The revamp package--aimed at rehabilitating and upgrading the existing facilities--will handle 150,000 barrels a day of oil production from Zubair.

Once the IPF and the degassing upgrade packages have been awarded, Eni will turn its focus to tackling bids for three degassing stations for Zubair North, Zubair South and Zubair Central.

Contractors said it will cost $2.4 billion to build the gas-oil separation units for Zubair Central while the cost for Zubair North is estimated at $1.6 billion.

The new degassing stations will handle rising crude volumes from Zubair and send gas supplies to the Iraqi state South Gas Company, which will hand over some of the gas to the south gas utilization project that was awarded in July to Royal Dutch Shell PLC (RDSA) but is still awaiting Iraqi government approval.

The 20-year Zubair service contract was awarded at an Iraqi licensing auction held in 2009 to the Eni-led group which also includes U.S. Occidental Petroleum Corp. (OXY) and Korea Gas Corp. (036460.SE), or Kogas.

The Zubair field--one of the largest Iraqi oil fields--was producing 195,000 barrels a day before it was awarded to Eni-led group. Production has since reached about 300,000 barrels a day and is expected to rise to a plateau level of 1.125 million barrels a day in 2016 as the full field development plan is completed.

By Hassan Hafidh; Dow Jones Newswires; +962 799 831 831; hassan.hafidh@dowjones.com

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