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Iraq unveils oilfields open for long-term contracts
30.6.2008
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June
30, 2008
BAGHDAD, — Iraq's Oil Ministry unveiled
on Monday six oilfield areas open to foreign firms
for long-term development contracts, clearing the
way for major international involvement in the
country's petroleum wealth.
The fields are Rumaila, Kirkuk, Zubair, West Qurna
Phase 1, Bai Hassan and the Maysan fields. Maysan
comprises three fields, Bazargan, Abu Gharab and
Fakka.
Oil Minister Hussain al-Shahristani announced the
list at a news conference in Baghdad. The government
has already pre-qualified 41 foreign firms to bid
for the contracts.
Two gas fields, Akkas and Mansuriyah, were also
opened.
The Oil Ministry said last week it had finished
negotiations with oil majors on six separate
short-term oil service contracts and hoped to sign
those deals during the next month.
The short-term deals, each worth about $500 million
(250 million pounds),www.ekurd.net
are aimed at quickly
lifting output at Iraq's largest producing fields by
a combined 500,000 barrels a day. Iraq's current oil
production is around 2.5 million bpd.
Taken together, the short-term and long-term
contracts will open the door to major international
involvement in the OPEC member's oil sector for the
first time in decades.
LARGE OIL RESERVES
The majors have been positioning themselves for
years in the hope of eventually gaining access to
Iraq's proven reserves, which at 115 billion barrels
are the world's largest after Saudi Arabia and Iran.
Deputy Prime Minister Dr Barham Salih said in April
that reserves could be as much as 350 billion
barrels.
Five of the short-term deals that have been under
discussion are with Royal Dutch Shell, Shell in
partnership with BHP Billiton, BP, Exxon Mobil and
Chevron in partnership with Total.
Iraq has also been in talks with a consortium of
Anadarko, Vitol and Dome for a sixth short-term
contract.
Those talks on the short-term deals have given the
majors a head start in efforts to bid for future oil
contracts. The U.S. companies were involved in Iraq
long before Saddam Hussein took over the country and
nationalised the oil industry.
After bids are submitted for the long-term
contracts, negotiations may take months. At the end
of 2008 or in early 2009, the oil ministry has said
it would announce the winners.
Oil is Iraq's main source of income, and boosting
output is key to earning the cash the country needs
for reconstruction.
Iraq's cabinet agreed a draft oil law in February
last year, but it has failed to get through
parliament partly because of rows between the
Kurdistan Regional Government (KRG) and Baghdad over
who will control oil reserves and contracts.
In the absence of the law, Baghdad has moved ahead
with the short and long-term contracts, saying this
is in line with an old oil law in existence before
the U.S.-led invasion in 2003.
Copyright, respective author or news agency, Reuters
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